Category: Current Affairs

Estimating the COVID-19 Infection Rate: Anatomy of an Inference Problem

That is a recent paper by Manski and Molinari, top people with econometrics.  Here is the abstract:

As a consequence of missing data on tests for infection and imperfect accuracy of tests, reported rates of population infection by the SARS CoV-2 virus are lower than actual rates of infection. Hence, reported rates of severe illness conditional on infection are higher than actual rates. Understanding the time path of the COVID-19 pandemic has been hampered by the absence of bounds on infection rates that are credible and informative. This paper explains the logical problem of bounding these rates and reports illustrative findings, using data from Illinois, New York, and Italy. We combine the data with assumptions on the infection rate in the untested population and on the accuracy of the tests that appear credible in the current context. We find that the infection rate might be substantially higher than reported. We also find that the infection fatality rate in Italy is substantially lower than reported.

Here is a very good tweet storm on their methods, excerpt: “What I love about this paper is its humility in the face of uncertainty.”  And: “…rather than trying to get exact answers using strong assumptions about who opts-in for testing, the characteristics of the tests themselves, etc, they start with what we can credibly know about each to build bounds on each of these quantities of interest.”

I genuinely cannot give a coherent account of “what is going on” with Covid-19 data issues and prevalence.  But at this point I think it is safe to say that the mainstream story we have been living with for some number of weeks now just isn’t holding up.

For the pointer I thank David Joslin.

Pollution is an Attack on Human Capital

Here’s the latest video from MRU where I cover some interesting papers on the effect of pollution on health, cognition and productivity. The video is pre-Covid but one could also note that pollution makes Covid more dangerous. For principles of economics classes the video is a good introduction to externalities and also to causal inference, most notably the difference in difference method.

Might I also remind any instructor that Modern Principles of Economics has more high-quality resources to teach online than any other textbook.

Is there a Hawaii heterogeneity?

Via Michael A. Alcorn, the vertical axis refers to new cases, here is the underlying code.  Or if you care about text:

Hawaii Department of Health officials said today that the state’s tally of coronavirus cases has risen to 553, up 12 from Thursday.

Of all the confirmed cases in Hawaii since the start of the outbreak, 48 have required hospitalizations, with three new cases reported today, health officials said.

The state’s coronavirus death toll stands at nine, unchanged from Thursday. Six of the deaths were on Oahu, while three were in Maui.

The population of Hawaii is about 1.4 million.  Three days ago, Hawaii was the lowest infection rate in the United States, but of course more and better data are needed.  We’ll see, with the passage of time, if this remains a true heterogeneity.  But do note this:

It is also noteworthy that Hawaii tests for coronavirus at a considerably higher rate than most states. According to data compiled by Vox, Hawaii continues to rank among the top 10 states for testing per capita, which suggests Hawaii’s infection rate may be more accurate than rates reported by some other states.

Developing…

Ahem

A widely followed model for projecting Covid-19 deaths in the U.S. is producing results that have been bouncing up and down like an unpredictable fever, and now epidemiologists are criticizing it as flawed and misleading for both the public and policy makers. In particular, they warn against relying on it as the basis for government decision-making, including on “re-opening America.”

“It’s not a model that most of us in the infectious disease epidemiology field think is well suited” to projecting Covid-19 deaths, epidemiologist Marc Lipsitch of the Harvard T.H. Chan School of Public Health told reporters this week, referring to projections by the Institute for Health Metrics and Evaluation at the University of Washington.

Others experts, including some colleagues of the model-makers, are even harsher. “That the IHME model keeps changing is evidence of its lack of reliability as a predictive tool,” said epidemiologist Ruth Etzioni of the Fred Hutchinson Cancer Center, home to several of the researchers who created the model, and who has served on a search committee for IHME. “That it is being used for policy decisions and its results interpreted wrongly is a travesty unfolding before our eyes.”

…The chief reason the IHME projections worry some experts, Etzioni said, is that “the fact that they overshot” — initially projecting up to 240,000 U.S. deaths, compared with fewer than 70,000 now — “will be used to suggest that the government response prevented an even greater catastrophe, when in fact the predictions were shaky in the first place.”

Here is the full story, from StatNews, by Sharon Begley with assistance from Helen Branswell, two very good and knowledgeable sources.  Via Matt Yglesias.

To be clear, I am (and always have been) fully aware that there are more nuanced epidemiological models “sitting on on the shelf,” just as is true for macroeconomics and many other areas.  But I ask you, where are the numerous cases of leading epidemiologists screaming bloody murder to the press, or on their blogs, or in any other manner, that the most commonly used model for this all-important policy analysis is deeply wrong and in some regards close to a fraud?  Yes I know you can point to a few tweets from the more serious people, but where has the profession as a whole been?  Who organized the protest letter and petition to The Wall Street Journal?

And to be clear, I have heard this model cited and discussed in many (off the record) policy discussions, this is not just something you can pin on the Trump administration narrowly construed (though they are at fault as well).

“Social Distancing is Working so Well!”

How do you feel about that statement?  I take this as one psychometric test.

If your reaction is: “My goodness, these are tragic times but it is splendid and noble how we all can come together and sacrifice for a common endeavor!”…well…

…you have failed my test and I will suspect a wee bit of mood affiliation.  Most likely it is bad news if the relative safety (for some) of the current moment comes from social distancing.  Because at some point social distancing must end, or at least be significantly curtailed, and then a higher danger level may well reemerge.

Possibly you have inside information that a cure will be ready next week, but somehow I doubt it.  You are happy because you like something about the process.

Alternatively, if you hear “social distancing is working so well!” and immediately feel a deep sense of foreboding, and begin to calculate whether good short-term results are correlated with better or worse long-term results.  And then you calculate how how long the distancing can last for, due to governmental budget constraints, and then try to figure out what kinds of progress we might make in the meantime while the distancing lasts, and then start worrying about how reliant on social distancing we are becoming…

…But then you undertake a second-order calculation about how the greater danger spurred by the forthcoming decline in social distancing also might spur innovation…

And then you think “would it not be better if the current progress came from a more sustainable source, what might that be, how about faster than expected herd immunity amongst a relatively small group of heterogeneous super-spreaders, now what is the chance of that?”…

…and finish your analysis confused…

Then you are my kind of weirdo.

We are living in a time of psychometric tests.

Fast Grants, a project of Emergent Ventures against Covid-19, status update

As you may recall, the goal of Fast Grants is to support biomedical research to fight back Covid-19, thus restoring prosperity and liberty.

Yesterday 40 awards were made, totaling about $7 million, and money is already going out the door with ongoing transfers today.  Winners are from MIT, Harvard, Stanford, Rockefeller University, UCSF, UC Berkeley, Yale, Oxford, and other locales of note.  The applications are of remarkably high quality.

Nearly 4000 applications have been turned down, and many others are being put in touch with other institutions for possible funding support, with that ancillary number set to top $5 million.

The project was announced April 8, 2020, only eight days ago.  And Fast Grants was conceived of only about a week before that, and with zero dedicated funding at the time.

I wish to thank everyone who has worked so hard to make this a reality, including the very generous donors to the program, those at Stripe who contributed by writing new software, the quality-conscious and conscientious referees and academic panel members (about twenty of them), and my co-workers at Mercatus at George Mason University, which is home to Emergent Ventures.

I hope soon to give you an update on some of the supported projects.

PPE Shortages and the Failure to Increase Prices

Ryan Peterson, Flexport Founder and CEO, has an excellent piece on Why There Aren’t Enough Masks, and How to Get More. One part of the problem is a lack of working capital brought about in part by a fear of raising prices:

Typically, buyers of PPE, whether hospitals or medical distributors, expect to place purchase orders and only pay for products upon delivery, or even later.

But when demand surges by 20x, vendors simply don’t have the money required to scale production. Factories need money to add production lines, buy raw materials, and hire workers. They need down payments so they can move.

Buyers prefer to pay upon receipt of goods for two reasons. The first is to ensure quality: They can refuse payment if the goods they receive don’t meet their standards. The second reason is they prefer to keep cash on their balance sheets, rather than paying vendors in advance.

In ordinary times, sellers will accept this. But with the entire world desperate to buy PPE, manufacturers know they can ask for a down payment and get it. Other more aggressive entities are paying down payments, so if US buyers won’t, they don’t get the supply.

American medical distributors, governments, and even hospital chains, by contrast, have been less willing, or less able, to adapt to the new reality of paying vendors upfront, at higher prices than they’d contracted.

At the same time, US distributors can’t pass higher prices through to hospitals in the midst of the crisis, for fear of being accused of profiteering. Foreign governments and healthcare systems have been less encumbered by this, showing a willingness to pay more and pay faster to get first in line.

There was a recent debate on twitter about so-called price-gouging. It was said that the argument for raising prices is weak when the elasticity of supply is low. That’s not necessarily true. First, in an emergency even a small increase in quantity can be very valuable so high prices can have high utility payoffs. Second, vendors face credit market frictions and capital constraints. Borrowing in an emergency is often not possible–this means that asset balances matter and transferring wealth from buyers to firms can ease financial constraints. Put another way, it’s the short run increase in price which allows long run elasticities to increase. Elasticity is endogenous to pricing.

Hat tip: Paul Graham.

Re-starting the economy

Will the U.S. economy re-open prematurely?:

New NBER survey of U.S. small companies nber.org/papers/w26989 Here is the percent, by industry, saying their business will still exist if the crisis lasts 6 months: All retail (except grocers): 33% Hotels: 27% Personal services: 22% Restaurants and bars: 15%

That is from Derek Thompson.  Or when will the non-payment of mortgages render the banking system insolvent and beyond saving by the Fed?

At some point, irreversible, non-linear economic damage sets in, and we won’t let that happen, no matter how many times someone tells you “there is no trade-off between money and lives.”

For some time now I have thought that America will reopen prematurely, with a very partial and indeed hypocritical reopening, but a reopening nonetheless.  In May, in most states but at varying speeds, including across cities.

You can see from this Chicago poll of top economists that virtually all of them oppose an early reopening.  I don’t disagree with their analysis, but they are too far removed from the actual debate.

America is a democracy, and the median voter will not die of coronavirus (this sentence is not repeated enough times in most analyses).  And so we will reopen pretty soon, no matter what the full calculus of lives and longer-run gdp might suggest.

Lyman Stone favors ending the lockdown.  It does not matter whether you agree with him or not.  Matt Parlmer predicts revolution if we don’t reopen in time.  I don’t agree with that assessment, but he is thinking along the right lines by not regarding the reopening date as entirely a choice variable.

The key is to come up with a better reopening rather than a worse reopening.

Any model of optimal policy should be “what should we do now, knowing the lockdown can’t last very long?” rather than “what is the optimal length of lockdown?”

And our best hope is that the risk of an early reopening spurs America to become more innovative more quickly with masks, testing, and other methods of reducing viral and economic risk.

CA Put Construction Into Limbo

One silver lining of the crisis is that the country has been getting rid of a lot of regulations that slow things down. CA, however, has decided to slow things down even more.

REASON: Last week, the Judicial Council of California—the rule-making body for the state’s courts—issued 11 emergency rules for the judicial system during the current pandemic.

Included in the council’s rules was a blanket extension of deadlines for filing civil actions until 90 days after the current state of emergency ends. Ominously for housing construction, this extended statute of limitations applies to lawsuits filed under the California Environmental Quality Act (CEQA).

That law requires local governments to study proposed developments for potentially significant environmental impacts. CEQA also gives third parties the power to sue local governments for approving a construction project if they feel that a particular environmental impact wasn’t studied enough.

The law has become a favored tool of NIMBYs and other self-interested parties to delay unwanted developments or to extract concessions from developers. Anti-gentrification activists use CEQA to stop apartment buildings that might cast too much shadow. Construction unions use the law as leverage to secure exclusive project labor agreements.

Under normal circumstances, these CEQA lawsuits have to be filed within 30 or 35 days of a project receiving final approval.

Notice that the law doesn’t say the NIMBYs get an extra 30 or 35 days to file. It says that NIMBYs get to file until 90 days “after the current state of emergency ends.” In other words, no one can know when they are free to build so the law could put every CA construction project that hasn’t already past CEQA review into limbo.

“If I’m a builder I can’t move forward with my project until the [CEQA] statute of limitations has expired. The reason why I can’t do that is because if you do move forward, courts have the authority to order you tear down what you’ve built,” Cammarota tells Reason, explaining that “lenders today are unwilling to fund those loans for construction until the statute of limitations has expired.”

Hat tip: Carl Danner.

The new (old) federalism under coronavirus

That is the topic of my Bloomberg column, here is one bit:

As May begins, it seems highly likely that the states will be reopening at their own paces and with their own sets of accompanying restrictions, with some places not reopening at all. There is likely to be further divergence at the city and county level, with say New York City having very different policies and practices than Utica or Rochester upstate.

Such divergence in state policy is hardly new. But until now states have typically had many policies in common, on such broad issues as education and law enforcement and on narrower ones such as support for Medicaid. Now and suddenly, on the No. 1 issue by far, the states will radically diverge.

Hence the idea that America is inching closer to what it was under the Articles of Confederation, which governed the U.S. from 1781 to 1789. The U.S. constitutional order has not changed in any explicit manner, but the issues on which the states are allowed to diverge have gone from being modest and relatively inconsequential to significant and meaningful if not dominant.

And:

This divergence may create further pressures on federalism. In Rhode Island, for example, state police have sought to stop cars with New York state license plates at the border, hindering or delaying their entrance. Whether such activities are constitutional, most governors do have broad authority to invoke far-reaching emergency powers.

As some states maintain strict lockdowns while others reopen and allow Covid-19 to spread, such border-crossing restrictions could become more common — and more important. Maryland has been stricter with pandemic control than has Virginia, so perhaps Maryland will deny or discourage entry from Virginia — in metropolitan Washington, there are only a few bridges crossing the river that divides the two states. Or maybe Delaware won’t be so keen to take in so many visitors from New Jersey, while Texas will want to discourage or block migration from Louisiana.

To be clear, I think this unusual situation will recede once Covid-19 is no longer such a serious risk.

Why isn’t Sweden exploding?

…Swedish state epidemiologist Anders Tegnell remains calm: he is not seeing the kind of rapid increase that might threaten to overwhelm the Swedish health service, and unlike policymakers in the UK, he has been entirely consistent that that is his main objective.

That is from a new piece by Freddie Sayers, asserting that “the jury is still out” when it comes to Sweden.  I cannot reproduce all of the graphs in that piece, but scroll through and please note that in terms of per capita deaths Sweden seems to be doing better than Belgium, France, or the United Kingdom, all of which have serious lockdowns (Sweden does not).  If you measure extant trends, Sweden is in the middle of the pack for Europe.  And here is data on new hospital admissions:

Now I understand that ideally one should compare similar “time cohorts” across countries, not absolute numbers or percentages.  That point is logically impeccable, but still as the clock ticks it seems less likely to account for the Swedish anomaly.

Of course we still need more days and weeks of data.

To be clear, I am not saying the United States can or should copy Sweden.  Sweden has an especially large percentage of people living alone, the Swedes are probably much better at complying with informal norms for social distancing, and obesity is much less of a problem in Sweden than America, probably hypertension too.

But I’d like to ask a simple question: who predicted this and who did not?  And which of our priors should this cause us to update?

I fully recognize it is possible and maybe even likely that Sweden ends up being like Japan, in the sense of having a period when things seem (relatively) fine and then discovering they are not.  (Even in Singapore the second wave has arrived, from in-migration, and may well be worse than the first.)  But surely the chance of that scenario has gone down just a little?

And here is a new study on Lombardy by Daniil Gorbatenko:

The data clearly suggest that the spread had been trending down significantly even before the initial lockdown. They invalidate the fundamental assumption of the Covid-19 epidemiological models and with it, probably also the rationale for the harshest measures of suppression.

One possibility (and I stress that word possibility) is that these Lombardy data, shown at the link, are reflecting the importance of potent “early spreaders,” often family members, who give Covid-19 to their families fairly quickly, but after which the average rate of spread falls rapidly.

I’ll stand by my claim that the pieces on this one show an increasing probability of not really adding up.  In the meantime, I am very happy to pull out and signal boost the best criticisms of these results.

Emergent Ventures Covid-19 prizes, second cohort

There is another round of prize winners, and I am pleased and honored to announce them:

1. Petr Ludwig.

Petr has been instrumental in building out the #Masks4All movement, and in persuading individuals in the Czech Republic, and in turn the world, to wear masks.  That already has saved numerous lives and made possible — whenever the time is right — an eventual reopening of economies.  And I am pleased to see this movement is now having an impact in the United States.

Here is Petr on Twitter, here is the viral video he had a hand in creating and promoting, his work has been truly impressive, and I also would like to offer praise and recognition to all of the people who have worked with him.

2. www.covid19india.org/

The covid19india project is a website for tracking the progress of Covid-19 cases through India, and it is the result of a collaboration.

It is based on a large volunteer group that is rapidly aggregating and verifying patient-level data by crowdsourcing.They portray a website for tracking the progress of Covid-19 cases through India and open-sources all the (non-personally identifiable) data for researchers and analysts to consume. The data for the react based website and the cluster graph are a crowdsourced Google Sheet filled in by a large and hardworking Ops team at covid19india. They manually fill in each case, from various news sources, as soon as the case is reported. Top contributor amongst 100 odd other code contributors and the maintainer of the website is Jeremy Philemon, an undergraduate at SUNY Binghamton, majoring in Computer Science. Another interesting contribution is from Somesh Kar, a 15 year old high school student at Delhi Public School RK Puram, New Delhi. For the COVID-19 India tracker he worked on the code for the cluster graph. He is interested in computer science tech entrepreneurship and is a designer and developer in his free time. Somesh was joined in this effort by his brother, Sibesh Kar, a tech entrepreneur in New Delhi and the founder of MayaHQ.

3. Debes Christiansen, the head of department at the National Reference Laboratory for Fish and Animal Diseases in the capital, Tórshavn, Faroe Islands.

Here is the story of Debes Christiansen.  Here is one part:

A scientist who adapted his veterinary lab to test for disease among humans rather than salmon is being celebrated for helping the Faroe Islands avoid coronavirus deaths, where a larger proportion of the population has been tested than anywhere in the world.

Debes was prescient in understanding the import of testing, and also in realizing in January that he needed to move quickly.

Please note that I am trying to reach Debes Christiansen — can anyone please help me in this endeavor with an email?

Here is the list of the first cohort of winners, here is the original prize announcement.  Most of the prize money still remains open to be won.  It is worth noting that the winners so far are taking the money and plowing it back into their ongoing and still very valuable work.

Policy for Covid-19, from Policy.NZ

Chris McIntyre from Wellington emails me:

“Pleased to share that COVID-19 Policy Watch is now live at www.covid19policywatch.org [links fixed]. We currently cover federal policies for 12 countries, including the US, UK, and China, with 15 more underway. We expect to expand our network of publishing partners from three, to five over the coming days. All feedback is most welcome.

A blurb for MR readers to edit as you see fit:

We aim for COVID-19 Policy Watch to be the most accessible source for governments’ policy responses to COVID-19 so that researchers, policymakers, journalists, and the general public can quickly learn about and compare governments’ responses. If you think this is important, we’d love your help: we’re seeking publishing partners (news media, universities, research groups) to keep country policies up to date, and experienced front- and back-end Drupal devs to help build new features. Interested parties should email covid19@policy.nz.

TC again: I am pleased to announce that Policy.NZ is a new Emergent Ventures winner (not Fast Grants with its biomedical orientation, rather “classic” Emergent Ventures).