Risk-Driven Responses to COVID-19 Eliminate the Tradeoff between Lives and Livelihoods

31 Pages Posted: 15 Dec 2020 Last revised: 16 Jan 2021

See all articles by Hazhir Rahmandad

Hazhir Rahmandad

Massachusetts Institute of Technology (MIT) - Sloan School of Management

TY Lim

Massachusetts Institute of Technology, Sloan School of Management, Students

Date Written: January 11, 2021

Abstract

Responses to the COVID-19 pandemic have been conditioned by a perceived tradeoff between saving lives and the economic costs of contact-reduction measures. We develop a model of SARS-CoV-2 transmission where populations endogenously reduce contacts in response to the risk of death. We estimate the model for 118 countries and assess the existence of a tradeoff between death rates and changes in contacts. In this model communities go through three phases – rapid early outbreaks, control through initial response, and a longer period of quasi-equilibrium endemic infection with effective reproduction number (Re) fluctuating around one. Analytical characterization of this phase shows little tradeoff between contact reduction levels (underpinning economic costs) and death rates. Empirically estimating the model, we find no positive correlation between (log) death rates and (normalized) contact levels across nations, whether contacts are estimated based on epidemic curves or mobility data. While contact reduction levels are broadly similar across countries, expected death rates vary greatly, by two orders of magnitude (5-95 percentile: 0.03-17 deaths per million per day). Results suggest nations could significantly reduce the human toll of the pandemic without more disruption to normal social and economic activity than they have already faced.

Keywords: epidemiology, COVID-19, SARS-CoV-2, epidemics, simulation, Bayesian estimation, economic tradeoff, mathematical model

JEL Classification: I12, I1, I18

Suggested Citation

Rahmandad, Hazhir and Lim, Tse Yang, Risk-Driven Responses to COVID-19 Eliminate the Tradeoff between Lives and Livelihoods (January 11, 2021). Available at SSRN: https://ssrn.com/abstract=3747254 or http://dx.doi.org/10.2139/ssrn.3747254

Hazhir Rahmandad (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main st.
E62-442
Cambridge, MA 02142
United States

Tse Yang Lim

Massachusetts Institute of Technology, Sloan School of Management, Students ( email )

Cambridge, MA 02139
United States

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