Information and Inequality in the Time of a Pandemic
IMF Working Papers, September 11, 2020
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- Information and Inequality in the Time of a Pandemic
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Bibliographic details
- Authors: Allan Dizioli, Roberto Pinheiro
- Published: September 11, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513556307.001
Model setup and heterogeneity
- Calibrated epidemiological search model introducing two forms of agent heterogeneity:
- Income/ability-to-isolate heterogeneity: some agents cannot afford staying home to minimize virus exposure (poor agents), while others can (unconstrained agents).
- Symptom-development heterogeneity: agents differ in developing symptoms (share of asymptomatic cases).
Key findings — health and economic outcomes
- Distributional health burden:
- Poor agents bear most of the epidemic’s health costs.
- Macro and labor effects:
- Having more agents who do not change their behavior during the pandemic could lead to a deeper recession.
- Diseases with higher share of asymptomatic cases, even if less lethal, lead to worse health and economic outcomes.
- Interaction of behavioral response and policy effectiveness:
- Lockdowns lose effectiveness when part of the agents take precautions to minimize virus exposure independent of government actions.
Policy implications and effectiveness
- Policies found to be particularly beneficial in economies with larger share of poor agents:
- Testing
- Quarantining
- Lockdowns
- Caveat on lockdowns:
- The effectiveness of lockdowns is diminished when a portion of agents already take private precautions that reduce exposure independent of government actions.
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- Working Paper