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Testing alone is insufficient

Author

Listed:
  • Rahul Deb

    (University of Toronto)

  • Mallesh Pai

    (Rice University)

  • Akhil Vohra

    (University of Cambridge)

  • Rakesh Vohra

    (University of Pennsylvania)

Abstract

The fear of contracting a serious illness caused by a contagious disease limits economic activity even after reopening. Widespread testing alone will not alleviate this problem. We argue that targeted testing in concert with targeted transfers is essential. We propose a model with these features to determine where agents should be tested and how they should be incentivized. Agents with a low wage, a high risk of infection, and who bear a large cost of falling ill should be tested at work. When testing is very costly, agents with high wages and low expected costs associated with falling ill should be tested at home.

Suggested Citation

  • Rahul Deb & Mallesh Pai & Akhil Vohra & Rakesh Vohra, 2022. "Testing alone is insufficient," Review of Economic Design, Springer;Society for Economic Design, vol. 26(1), pages 1-21, March.
    • Handle: RePEc:spr:reecde:v:26:y:2022:i:1:d:10.1007_s10058-022-00295-6
    DOI: 10.1007/s10058-022-00295-6
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    References listed on IDEAS

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    Cited by:

    1. Carnehl, Christoph & Fukuda, Satoshi & Kos, Nenad, 2023. "Epidemics with behavior," Journal of Economic Theory, Elsevier, vol. 207(C).

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    More about this item

    Keywords

    Epidemics; Mechanism design; COVID-19; Health policy;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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