Shaun P. Hargreaves Heap, Christel Koop, Konstantinos Matakos, Asli Unan, Nina Weber, 06 June 2020

The behavioural interventions to control the spread of COVID-19 present trade-offs between health and wealth. To be successful, an understanding of how the public currently values lives over economic loss is needed. A survey experiment in the US and UK finds that people highly prioritise saving lives, but this valuation will change as economic losses mount. Individual differences in valuation also predict individual compliance with COVID-19 policies, and information on COVID-19 deaths and income losses can affect valuations. Caution in relaxing the lockdown will help build public support and mitigate polarising effects and, through increasing compliance, improve its economic efficacy.

Thiemo Fetzer, Lukas Hensel, Johannes Hermle, Chris Roth, 21 March 2020

There is a risk that economic anxiety over the coronavirus crisis will fuel a long-term economic downturn. This column uses Google search activity and individual survey data to document a rapid increase in economic anxiety in the US in response to the initial global spreading of the virus. Survey respondents tended to overestimate the mortality and contagiousness of COVID-19, but underestimated the non-linear nature of how infectious diseases spread. This suggests that information and public education may play a central role in containment and in managing the negative economic impact of increased economic anxiety.

Events

CEPR Policy Research