Bayesian Estimation of Epidemiological Models: Methods, Causality, and Policy Trade-Offs

60 Pages Posted: 1 Apr 2021

See all articles by Jonas Arias

Jonas Arias

Federal Reserve Bank of Philadelphia

Jesús Fernández-Villaverde

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Juan F. Rubio-Ramírez

Emory University; Foundation for Applied Economic Research (FEDEA); Federal Reserve Banks - Federal Reserve Bank of Atlanta; BBVA Research

Minchul Shin

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Multiple version iconThere are 4 versions of this paper

Date Written: March 2021

Abstract

We present a general framework for Bayesian estimation and causality assessment in epidemiological models. The key to our approach is the use of sequential Monte Carlo methods to evaluate the likelihood of a generic epidemiological model. Once we have the likelihood, we specify priors and rely on a Markov chain Monte Carlo to sample from the posterior distribution. We show how to use the posterior simulation outputs as inputs for exercises in causality assessment. We apply our approach to Belgian data for the COVID-19 epidemic during 2020. Our estimated time-varying-parameters SIRD model captures the data dynamics very well, including the three waves of infections. We use the estimated (true) number of new cases and the time-varying effective reproduction number from the epidemiological model as information for structural vector autoregressions and local projections. We document how additional government-mandated mobility curtailments would have reduced deaths at zero cost or a very small cost in terms of output.

JEL Classification: C1, C5, I1

Suggested Citation

Arias, Jonas and Fernández-Villaverde, Jesús and Rubio Ramírez, Juan and Shin, Minchul, Bayesian Estimation of Epidemiological Models: Methods, Causality, and Policy Trade-Offs (March 2021). CEPR Discussion Paper No. DP15951, Available at SSRN: https://ssrn.com/abstract=3816826

Jonas Arias (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

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Jesús Fernández-Villaverde

University of Pennsylvania - Department of Economics ( email )

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Juan Rubio Ramírez

Emory University ( email )

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Minchul Shin

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

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