The Economic Consequences of R = 1: Towards a Workable Behavioural Epidemiological Model of Pandemics
24 Pages Posted: 20 Aug 2020 Last revised: 10 Jan 2022
Date Written: January 9, 2022
This paper reviews the literature on incorporating behavioural elements into epidemiological models of pandemics. While modelling behaviour by forward-looking rational agents can provide some insight into the time paths of pandemics, the non-stationary nature of Susceptible-Infected-Removed (SIR) models of viral spread makes characterisation of resulting equilibria difficult. Here I posit a shortcut that can be deployed to allow for a tractable equilibrium model of pandemics with intuitive comparative statics and also a clear prediction that effective reproduction numbers (that is, R) will tend towards 1 in equilibrium. This motivates taking R = 1 as an equilibrium starting point for analyses of pandemics with behavioural agents. The implications of this for the analysis of widespread testing, tracing, isolation and mask-use is discussed.
Note: Funding: None.
Conflict of Interest: NO conflicts of interests or financial interests.
Keywords: COVID-19, epidemiology, SIR model, pandemics
JEL Classification: I12, I18
Suggested Citation: Suggested Citation