Pandemic comparison: COVID-19 vs. London Plague

Dasgupta et al. (2020) compares individual behavior in the COVID-19 pandemic with the 1665 London plague outbreak based on the descriptions by Daniel Defoe in A Journal of the Year of the Plague. The historical comparison is interesting throughout and merits a full read. Some excerpts are below.

On the failure to recognize the disease’s severity:

Given their relative disbelief in the severity of the outbreak, in the early days people in every country or borough of London believed that there really was no cause for concern. Those in London believed it might affect other parts and maybe it existed in the outskirts but had not arrived in the city. For Covid often people believed it to be no more fatal than the flu or an infection that was present elsewhere. As a result, they did not take adequate measures to protect themselves. 

In both COVID-19 and the London plague, consumer hoarded goods. In the case of COVID-19, it was food, masks and toilet paper; in the London plague hoarding household goods was common. The hoarding is due to the uncertain nature of the duration of the pandemic. In addition:

…sellers too react to such episodes in very predictable ways. A very pointed instance of hoarding that Defoe describes in the book is when trying to escape the city to Lincolnshire, he witnesses an acute shortage of horses for hire even though most people were not moving around the city. There are other instances where he talks about theft—for instance of an unnecessary item like women’s hats from an unguarded warehouse in London, as well as frequent descriptions of food shortages. Similar instances of opportunistic market behavior can be found in the current pandemic…a seller in Florida was offering 15 N95 face masks on Amazon for $3,799, milk was being sold at $10 per gallon in a convenience store in Massachusetts, and of course the most curious of case where toilet rolls were vanishing from stores and being offered at exorbitant prices

With prices fluctuating frequently during a pandemic, opportunism is common.

Increased faith in “miraculous cures” also commonly occurs.

As Defoe notes “…they were as mad upon their running after quacks and mountebanks, and every practicing old woman, for medicines and remedies.” Models of herding behavior of the type developed by Banerjee (1992) and Bikhchandani, Hirshleifer, and Welch (1992) can be used to explain such behavior. Imagine that each person receives a private signal about the effectiveness of the miracle cure. However, if they observe other people believing in such a cure (since there is no known cure), an individual might ignore their private signal and follow the herd…Waiting to learn about the effectiveness of a cure during a pandemic can be costly (strategic delay), and this in itself can lead to herding.

On the positive side, necessity is the mother of invention. While remote working, teleconference, and contactless technology grew out of COVID-19, innovation also occured during the time of the plague.

Defoe notes the example of a waterman who took up the job of delivering water when he realized that there was a huge demand for such basic necessities stuck in the anchored ships in the nearby docks, which in turn provided him “… a great sum, as things go now with poor men”

Do read the entire article as there are many more interesting examples.

from Healthcare Economist https://ift.tt/325cux8