Category: Medicine

Coronavirus markets in everything, Swedish restaurant edition

At Rasmus Persson and Linda Karlsson’s restaurant, you don’t have to order takeout, or wear a mask, or try to stay two metres away from the other patrons — because there are no other patrons.

It’s just you, seated alone at a table in a picturesque meadow in the Swedish countryside as you’re served a homemade meal that arrives in a basket using a rope and pulley.

It’s called Bord För En, which translates to “table for one,” and it opened on May 10 in Ransäter, a rural town some 350 kilometres west of Stockholm.

“We wanted to create a space that’s 100 per cent corona-free, as much as we could at least,” Persson told As It Happens host Carol Off.

Here is the full story, via Michelle Dawson, and no you don’t have to worry about them having too many beautiful women…

And here is their Facebook page with further details and images.  By the way, most of the customers are men.  Then there is this:

When you book your reservation at Bord För En, you include a list of names of your close friends, and the restaurateurs then solicit one of them to write you a personal message.

It operates on a “pay what you wish” basis, and so far they have been heavily booked.

Conor Friedersdorf interviews me on the regulatory state and the pandemic

For Atlantic, here is one excerpt:

“Our regulatory state is failing us.”

And to troll some of you, here is another bit:

Friedersdorf: Libertarians and small-government conservatives are highly skeptical of the regulatory state. What do they get wrong?

Cowen: Very often, the alternative to regulation is ex post facto reliance on the courts and juries to redress wrongs. Of course, the judiciary and its components are further instruments of governments, and they have their own flaws. There is no particular reason, from, say, a libertarian point of view, to expect such miracles from the courts. Very often, I would rather take my chances with the regulators.

Also, let’s not forget the cases where the regulators are flat-out right. Take herbal medicines, penis enlargers, or vaccines. In those cases, the regulators are essentially correct, and there is a substantial segment of the population that is flat-out wrong on those issues, and sometimes they are wrong in dangerous ways.

Recommended, there is much more at the link.

The shift of prevalance toward the young

Half of new coronavirus infections in Washington [state] are now occurring in people under the age of 40, a marked shift from earlier in the epidemic when more than two-thirds of those testing positive were in older age groups.

A new analysis finds that by early May, 39% of confirmed cases statewide were among people age 20 to 39, while those 19 and younger accounted for 11%.

Here is the full article, via Anecdotal.  A number of points:

1. As people adjust, and the higher-risk individuals take greater precautions, and the lower risk people relax their vigilance, this is likely to happen.

2. The case for age segregation, as a remedy and protection, becomes stronger.  If your policy prescriptions never change over the course of a pandemic, you are not paying sufficient attention, or you are a dogmatist, or both.

3. Universities have to worry a bit less about their students and a bit more about their faculty, at the margin.

4. As more young people acquire immunity, the incentive for yet additional young people to invest in immunity, through stochastic deliberate exposure, rises.  That in turn strengthens #2 and #3.

5. Will markets play a further role in this trend?  The excellent Kevin Lewis sends me the following (WSJ):

…while surging demand has proven a boon for the traders known as blood brokers who source this commodity, diagnostic companies say high prices for the blood of recovered Covid-19 patients are posing a hurdle to developing tests. ‘We’ve had a terrible time trying to obtain positive specimens at a decent rate,’ said Stefanie Lenart-Dallezotte, manager of business operations for San Diego-based Epitope Diagnostics Inc., which sells an antibody test for Covid-19…She said one broker quoted $1,000 for a one-milliliter sample of convalescent plasma, a term for the antibody-containing part of the blood from recovered patients. Executives at other diagnostics companies say they have been quoted prices of several thousand dollars for one milliliter of plasma.

What is the market-clearing price here, and what is the elasticity of exposure with respect to that price?  Evolving…

The case for a market allocation of vaccines

Or a partial such allocation, at least.  Here is my latest Bloomberg column:

The renowned economist Erik Brynjolfsson recently asked: “At least so far, I haven’t seen any one suggesting to use the market system to allocate vaccines. Not even those who strongly advocate it in other areas. Why is that?”

As one of several people copied at the bottom of the tweet, I feel compelled to take up the challenge.

I readily admit that a significant portion of the vaccines, when they come, should be allocated by non-market forces to health care workers, “front line” workers, servicemen on aircraft carriers, and so on.  Yet still there is room for market allocation, especially since multiple vaccines are a real possibility:

If you had to choose among those vaccines, wouldn’t it make sense to look for guidance from market prices? They will reflect information about the perceived value of both protection and risk. On the same principle, if you need brain surgery, you would certainly want to know what the brain surgeon charges, although of course that should not be the only factor in your decision.

And:

The market prices for vaccines could be useful for other purposes as well. If scientific resources need to be allocated to improve vaccines or particular vaccine approaches, for instance, market prices might be useful signals.

Note also that the scope of the market might expand over time. In the early days of vaccine distribution, health-care workers will be a priority. Eventually, however, most of them will have access to vaccines. Selling off remaining vaccine doses might do more to encourage additional production than would bureaucratic allocation at a lower price.

Say China gets a vaccine first — how about a vaccine vacation in a nearby Asian locale (Singapore? Vietnam?) for 30k?  Unless you think that should be illegal, you favor some form of a market in vaccines.

In any case, there is much more at the link.  Overall I found it striking how few people took up Erik’s challenge.  Whether or not you agree with my arguments, to me they do not seem like such a stretch.

Our regulatory state is failing us

You don’t think airlines can just provide hand sanitizer to passengers, do you? On Tuesday the FAA wrote to American Airlines granting permission, and the letter they sent (.pdf) offers a window into process the airline had to go to in order to secure the government’s blessing.

Tuesday’s correspondence came from the FAA’s American Airlines Certificate Management Office in Irving, Texas. Imagine having a local office of a federal agency dedicated to your business, with its own letterhead.

American wanted permission to provide “personal use quantities of hand sanitizer gel and sanitizing wipes to customers prior to boarding and/or distributed during flight.” That means there would be hand sanitizer on the aircraft, and that falls within the FAA’s jurisdiction.

Before writing for permission, a team from American Airlines held two separate meetings with FAA inspectors, from two separate FAA offices – the airline’s direct regulators in their certificate management office, and also with the Office of Hazardous Materials Safety. The purpose of these meetings was “to discuss the 14 CFR part 5 required safety risk assessment” required to have hand sanitizer on board.

Passengers and crew are permitted to carry hand sanitizer, consistent with 49 CFR §175.10. And shippers can carry hand sanitizer, consistent with 49 CFR §173.150(g). For the airline to carry and distribute it, though, 49 CFR §175.8 (a)(4) requires permission of the Administrator of the FAA.

And:

The FAA issued a finding that American’s proffered plan to offer hand sanitizer to passengers “meets conditions for FAA approval allowed in 49 CFR §175.8 (a)(4).” Even so, the specific products that the airline sources for use must be “approved by the AA Chemical Review Board (CRB) to meet the above CFR limitations and will be tracked on an internal reference list.”

Furthermore, permission is contingent on “mitigations and procedures included in the AA RWM ‘Corp SMS and Team – 200512- 01 / Hand Sanitizer in Amenity Kits and Snack Bags’ [being] “completed and complied with.” Any deviations require advance coordination with the dedicated FAA Certificate Management Office for American Airlines “prior to any further flights that provide personal use quantities of hand sanitizer gel and sanitizing wipes to customers.”

A small matter, yes, but indicative of the larger whole.  Here is the full post from Air Genius Gary Leff, via Lama.

Stockholm City’s Elderly Care and Covid19

Upwards of 70 percent of the Covid19 death toll in Sweden has been people in elderly care services (as of mid-May 2020). We summarize the Covid19 tragedy in elderly care in Sweden, particularly in the City of Stockholm. We explain the institutional structure of elderly care administration and service provision. Those who died of Covid19 in Stockholm’s nursing homes had a life-remaining median somewhere in the range of 5 to 9 months. Having contextualized the Covid19 problem in City of Stockholm, we present an interview of Barbro Karlsson, who works at the administrative heart of the Stockholm elderly care system. Her institutional knowledge and sentiment offer great insight into the concrete problems and challenges. There are really two sides the elderly care Covid19 challenge: The vulnerability and frailty of those in nursing homes and the problem of nosocomial infection—that is, infection caused by contact with others involved in the elderly care experience. The problem calls for targeted solutions by those close to the vulnerable individuals.

That is the abstract of a new paper by Charlotta Stern and Daniel B. Klein.

In developing countries the coronavirus deaths are younger

In Brazil, 15 percent of deaths have been people under 50 — a rate more than 10 times greater than in Italy or Spain. In Mexico, the trend is even more stark: Nearly one-fourth of the dead have been between 25 and 49. In India, officials reported this month that nearly half of the dead were younger than 60. In Rio de Janeiro state, more than two-thirds of hospitalizations are for people younger than 49.

And here are the speculations:

Because population density is so much higher in much of the developing world — and because so many people must keep working to survive — a far greater share of the population ends up being exposed to the virus.

The virus then spreads through a population that’s less resilient. People in the developing world grapple not only with the diseases that have long been associated with it — malaria, dengue, tuberculosis, HIV/AIDS — but increasingly with those more closely associated with wealthier countries. Rates of diabetes, obesity and hypertension are surging. But treatment for many such illnesses is lacking.

Here is more from Terrence McCoy and Heloisa Traiano.

Fairfax County fact of the day

Fairfax County Health Department responded to my request for nursing home/longterm care facility deaths from COVID-19. As of May 22, there have been 249 coronavirus deaths in these facilities. That’s ***75 percent*** of all Fairfax County deaths from coronavirus as of today (330)

Here is the link, via Alex T.  For epidemiology, shouldn’t those numbers be in a separate model altogether?

Also, it would be very interesting to test the performance of the private sector vs. public sector institutions here.

Which NBA teams will gain in relative prospects from the shutdown?

The Los Angeles Lakers, far and away.

The most valuable stars, such as LBJ, have their own private gyms and work-out rooms, often in their homes.  They have stayed in the best shape, and of course LBJ has the discipline too.  Those star players also are the most used to unusual circumstances (All-star games, Olympics, etc.) and being accustomed to higher than average levels of pressure.  They rely less on crowd support than do the role players, noting it is the latter who benefit much more from home court advantage.  If the games are played in Las Vegas and Orlando, and without crowds, no one will have home court advantage (except the Orlando Magic, sort of).

So teams built around star veterans will have higher chances of doing better in the playoffs.

The interrupted and probably shortened season also will be easier on the older players, which again covers LeBron.  Anthony Davis is not so old but the Lakers would love to play him as many minutes as possible.

The teams with “many necessary complementary parts” will fare worst in relative terms.  With such a long break, surely at least 10-20% of those players have “gone off the reservation,” so to speak, and will not return to quality form for some time.  Those teams will not gel so easily and find their groove.

Who might that be?  I know the Clippers have two big stars, but they seem to rely a lot on the team as a whole.  Who else?  The Celtics maybe?  Indiana?

What are the implications of this analysis for management and business firms?  Will teams built around a superstar have an advantage there too?

The Japan model

So what is the Japan model? First, it is a cluster-based approach, derived from a hypothesis obtained from an epidemiological study based on Chinese data and conducted on the Diamond Princess cruise ship that entered the port of Yokohama on February 3, 2020. This hypothesis accounts for the many passengers who were not infected with the coronavirus despite having had close contact with infected persons. It posits that the explosive increase in infected persons is a result of the high transmissibility of certain infected individuals, which forms a cluster. Infected individuals with even higher transmissibility appear from these clusters to form more clusters and infect many others. Based on this hypothesis, under the cluster-based approach, each cluster is tracked to the original infection source and persons with high transmissibility are isolated to prevent the spread of infection. For this reason, pinpoint testing is carried out and broad testing of the population is not required, in contrast to the approaches taken in other counties.

This cluster-based approach is conditioned on an environment in which there are only a few infected persons and clusters are detectable at an early stage. In February 2020, when the spread of infection was observed in Hokkaido, a cluster-based approach was adopted. As a result, Hokkaido was successfully able to contain its outbreak.

For the cluster-based approach to be effective, protective measures at airports and ports are important. Hokkaido has the advantage of being an island, making it comparatively easy to control the inflow of infected people. Behavioral changes are also required. On February 28, 2020, acting without legal basis, Hokkaido Governor Naomichi Suzuki declared a state of emergency and called on residents to refrain from going outside. Residents took the call seriously, and are responsible for the success of the cluster-based approach. Following its success in Hokkaido, the cluster-based approach was adopted nationally. On February 25, 2020, a Cluster Response Team was established in the Ministry of Health, Labour and Welfare.

Here is more from Kazuto Suzuki, with other points of note.

How will Fairfax County evolve?

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

The immediate future of my region thus appears to be a major demand shock to the stores, acceptable continuing employment for the upper middle class, and economic devastation for lower-income individuals. The traditional mix of government-connected employment and retail will swing heavily in the direction of government. In essence, the federal government will pay its employees to click on Amazon while working from home.

And:

The ethnic dimension of Covid-19 in Fairfax County is especially noteworthy. Latinos make up 16.8% of the county’s population, but account for 62.7% of the diagnosed Covid-19 cases. And if you assume that perhaps lower-income Latinos are less willing or able to go to a doctor, the true percentage of the Latino cases may be higher yet.

I thus foresee a future where people are more reluctant to hire Latino immigrants for housework or for child care, and thus additional home responsibilities will fall on parents, probably disproportionately on women. In turn, I expect many Latinos to leave the area, at least temporarily, unable to afford the higher rents when there is little work. There may also be greater employer discrimination against Latino applicants, as unfair or unjust as that would be.

Those developments will lead to Fairfax County becoming whiter. (If you are wondering, blacks are a slightly lower Covid-19 case share in the county than population share).

Recommended, for all those who care.

My (second) Conversation with Paul Romer

Interesting throughout, here is the audio and transcript.  Here is the summary:

Paul Romer makes his second appearance to discuss the failings of economics, how his mass testing plan for COVID-19 would work, what aspect of epidemiology concern him, how the FDA is slowing a better response, his ideas for reopening schools and Major League Baseball, where he agrees with Weyl’s test plan, why charter cities need a new name, what went wrong with Honduras, the development trajectory for sub-Saharan Africa, how he’d reform the World Bank, the underrated benefits of a culture of science, his heartening takeaway about human nature from his experience at Burning Man, and more.

I liked the parts about charter cities and the World Bank the best, here is one excerpt:

COWEN: How optimistic are you more generally about the developmental trajectory for sub-Saharan Africa?

ROMER: There’s a saying I picked up from Gordon Brown, that in establishing the rule of law, the first five centuries are always the hardest. I think some parts of this development process are just very slow. If you look around the world, all the efforts since World War II that’s gone into trying to build strong, effective states, to establish the rule of law in a functioning state, I think the external investments in building states have yielded very little.

So we need to think about ways to transfer the functioning of existing states rather than just build them from scratch in existing places. That’s a lot of the impetus behind this charter cities idea. It’s both — you select people coming in who have a particular set of norms that then become the dominant norms in this new place, but you also protect those norms by certain kinds of administrative structures, state functions that reinforce them.

And this:

COWEN: If you could reform the World Bank, what would you do?

ROMER: Oh, that’s an interesting question. I think the Bank is trying to serve two missions, and it can’t do both. One is a diplomatic function, which I think is very important. The World Bank is a place where somebody who represents the government of China and somebody who represents the government of the United States sit in a conference room and argue, “Should we do A or B?” Not just argue, but discuss, negotiate. On a regular basis, they make decisions.

And it isn’t just China and the US. It’s a bunch of countries. I think it’s very good for personal relationships, for the careers of people who will go on to have other positions in these governments, to have that kind of experience of, basically, diplomatic negotiation over a bunch of relatively small items because it’s a confidence-building measure that makes it possible for countries to make bigger diplomatic decisions when they have to.

That, I think, is the value of the World Bank right now. The problem is that that diplomatic function is inconsistent with the function of being a provider of scientific insight. The scientific endeavor has to be committed to truth, no matter whose feathers get ruffled. There’s certain convenient fictions that are required for diplomacy to work. You start accepting convenient fictions in science, and science is just dead.

So the Bank’s got to decide: is it engaged in diplomacy or science? I think the diplomacy is its unique comparative advantage. Therefore, I think it’s got to get out of the scientific business. It should just outsource its research. It shouldn’t try and be a research organization, and it should just be transparent about what it can be good at and is good at.

And toward the end:

COWEN: Last question thread, what did you learn at Burning Man?

ROMER: Sometimes physical presence is necessary to appreciate something like scale. The scale of everything at Burning Man was just totally unexpected, a total surprise for me, even having looked at all of these pictures and so forth. That was one.

Another thing that really stood out, which is not exactly a surprise, but maybe it was the surprise in that group — if you ask, what do people do if you put them in a setting where there’s supposed to be no compensation, no quid pro quo, and you just give them a chance to be there for a week. What do they do?

They work.

For purposes of contrast, here is my first Conversation with Paul Romer.

Will Covid-19 expose the ghost firms?

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

Demand for in-restaurant dining is likely to fall as well, though estimates vary. Since the average small business carries less than a month’s worth of liquid reserves, and the wait for a vaccine is likely to be at least a year, many restaurants will simply be unable to survive the shrinking of the market.

I call these places ghost restaurants because they are still walking around, so to speak, visible to us and listed on Yelp, but not really alive and without much of a future.

In a few months’ time, a significant number of these ghost enterprises will be gone. My drive around Northern Virginia, rather than being rich with culinary choice, will soon become fairly desolate — and the overall economic landscape will indeed be much emptier.

What else in our current capital structure might qualify as “ghost”?

And this:

And while an all-but-certain death awaits some businesses, others can look forward to mere stagnation. If you are a 23-year-old entrepreneur, how easy will it be to build up the network of “soft ties” that will help you launch the next phase of your career?

As many marginal businesses are going under, it is quite possible that the public-health situation will improve. Civic spaces will repopulate as commercial ones depopulate, giving urban landscapes a confusing feel. And because there will be fewer businesses to choose from, it will be all the harder for those remaining to enforce social distancing.

Many Americans have been clamoring lately for more freedom, and those desires are understandable. But as they emerge from lockdown, they might well be disappointed to discover that, above all else, what people will be exercising is the freedom to go out of business.

If you start by using the word “ghost” (better than zombie, in this setting), don’t be surprised if the column turns out a bit gloomy!

Early distancing can be very potent

Finally a rainfall paper that perhaps you can believe in!?:

We test whether earlier social distancing affects the progression of a local COVID-19 out-break. We exploit county-level rainfall on the last weekend before statewide lockdown. After controlling for state fixed-effects, temperature, and historical rainfall, current rainfall is a plausibly exogenous instrument for social distancing. Early distancing causes a reduction in cases and deaths that persists for weeks. The effect is driven by a reduction in the chance of a very large outbreak. The result suggests early distancing may have sizable returns, and that random events early in an outbreak can have persistent effects on its course.

Here is more from Rolly Kapoor, et.al.  Here is a relevant Twitter thread, via Gaurav Sood.