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Optimal interventions in networks during a pandemic

Author

Listed:
  • Roland Pongou

    (University of Ottawa
    Harvard University)

  • Guy Tchuente

    (University of Kent
    NISER)

  • Jean-Baptiste Tondji

    (The University of Texas Rio Grande Valley)

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 US 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 US states with Republican governors have a higher tolerable incidence level, but these policies tend to converge with a high death count.

Suggested Citation

  • Roland Pongou & Guy Tchuente & Jean-Baptiste Tondji, 2023. "Optimal interventions in networks during a pandemic," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(2), pages 847-883, April.
    • Handle: RePEc:spr:jopoec:v:36:y:2023:i:2:d:10.1007_s00148-022-00916-y
    DOI: 10.1007/s00148-022-00916-y
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    More about this item

    Keywords

    COVID-19; Health-vs-wealth prioritization; Lockdown; Networks; Nursing homes;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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