Optimal Interventions in Networks during a Pandemic

Pongou, R., Tchuente, G., & Tondji, J. B. (2023). Optimal interventions in networks during a pandemic. Journal of Population Economics, 36(2), 847-883.

68 Pages Posted: 21 Sep 2020 Last revised: 3 Oct 2023

See all articles by Roland Pongou

Roland Pongou

University of Ottawa - Department of Economics

Guy Tchuente

University of Kent

Jean-Baptiste Tondji

University of Texas Rio Grande Valley (UTRGV) (Formerly University of Texas-Pan American) - Economics and Finance; Department of Economics and Finance, University of Texas Rio Grande Valley

Date Written: October 17, 2021

Abstract

We develop a model of optimal lockdown policy for a social planner who balances population health with short-term wealth accumulation. The unique solution depends on tolerable infection incidence and social network structure. We then use unique data on nursing home networks in the United States to calibrate the model and quantify state-level preference for prioritizing health over wealth. We also empirically validate simulation results derived from comparative statics analyses. Our findings suggest that policies that tolerate more virus spread (laissez-faire) increase state GDP growth and COVID-19 deaths in nursing homes. The detrimental effects of laissez-faire policies are more potent for nursing homes that are more peripheral in networks, nursing homes in poorer counties, and nursing homes that operate on a for-profit basis. We also find that U.S. states with Republican governors have a higher tolerable incidence level, but these policies tend to converge with a high death count.

Note: Funding: None to declare

Declaration of Interest: None to declare

Keywords: COVID-19, Health-vs-wealth prioritization, Lockdown, Networks, Nursing homes

JEL Classification: D85, E61, H12, I18, J15

Suggested Citation

Pongou, Roland and Tchuente, Guy and Tondji, Jean-Baptiste, Optimal Interventions in Networks during a Pandemic (October 17, 2021). Pongou, R., Tchuente, G., & Tondji, J. B. (2023). Optimal interventions in networks during a pandemic. Journal of Population Economics, 36(2), 847-883., Available at SSRN: https://ssrn.com/abstract=3692890 or http://dx.doi.org/10.2139/ssrn.3692890

Roland Pongou

University of Ottawa - Department of Economics ( email )

200 Wilbrod Street
Ottawa, Ontario K1N 6N5
Canada

Guy Tchuente

University of Kent ( email )

Keynes College, University of Kent
Canterbury, Kent CT2 7NP
United Kingdom

HOME PAGE: http://https://www.kent.ac.uk/economics/staff/profiles/guy-tchuente.html

Jean-Baptiste Tondji (Contact Author)

University of Texas Rio Grande Valley (UTRGV) (Formerly University of Texas-Pan American) - Economics and Finance ( email )

1201 W. University Dr.
Edinburg, TX
United States

Department of Economics and Finance, University of Texas Rio Grande Valley ( email )

1201 W. University Drive
Edinburg, TX 78541
United States
956-665-2825 (Phone)

HOME PAGE: http://https://sites.google.com/site/jbtondjicom

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