Economics serving society

Projects in progress on the pandemic

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Last updated: November 20, 2020

Development of a “COVID” module in the Medico-economics project

The PRME (Medico-economics research project), led by Lise Rochaix, scientific director of the Hospinnomics chair, with methodological input from Luc Behaghel of J-Pal Europe, analyses data from a digital therapeutic education platform for transplant patients and people suffering chronic kidney failure. The monitoring of platform activity since the beginning of the epidemic shows that the number of visitors to the site tripled between the first and the 16th of March compared with a whole month in a normal period. The project’s steering committee proposed the introduction of a specific COVID module (currently being developed), to measure people’s perceptions of their capacity to access important medical information, the sources of the information used, and their feeling of being in good hands.

The project was established within the Hospinomics chair programme (AP-HP / PSE) “hospital - innovation – economics”. Its researchers are also involved in the following activities:

Participation in COVID forums
Through its deputy director, Jean-Claude Dupont, the Hospinomics chair group is actively involved in the steering committee for research undertaken by the AP-HP under the joint direction of professors Steg and Yazdanpanah, as well as in the AP-HP’s Scientific and Ethics Committee for the data collection, which is charged with analysis of projects involving the cohort of patients with COVID-19.

Participation in the Committee of Experts of the Baromètre dataCOVID
Lise Rochaix is a member of the Committee of Experts of the collaborative project Baromètre dataCOVID whose role is to ensure the scientific quality of the key questionnaire and the complementary module developed each week by IPSOS for 5,000 representative individuals on a current theme (e.g. emerging social inequalities, attitudes to the environment).

Incentive mechanisms and the search for a vaccine against COVID-19

An effective vaccine against corona virus infection will be a precious tool in controlling the epidemic without having to return to a general lockdown and in bearing its considerable social and economic costs. This article explores schemes to encourage innovations that might increase efforts to find a vaccine and to accelerate the implementation of such a vaccine.

A social distancing model with heterogeneous agents

Social distancing consists of eliminating links in social networks. A lockdown imposes a uniform limit on all agents regardless of the number of links among them. The goal of this work is to study a social distancing equilibrium in a model whose agents are heterogeneous in their number of links, by extending the Toxvaerd (2020) model, which uses homogeneous agents. The originality of the model compared with classic epidemiological models is that it takes into account the behaviour of agents who are faced with a trade-off between the cost of social distancing and the benefit of containing the epidemic. The techniques used are informed by the "degree-based mean field” analysis used in the study of complex networks. The authors will examine the effect of non-uniform social distancing policies that target different population groups depending on their number of social links.

Compensating the dead

This theoretical article addresses the difficult question of compensating victims of premature death, and in so doing, also addresses the question of the structure of an “insurance against death” or an “insurance against a short life”. A premature death constitutes a special harm, because of the extent of the loss the event creates and because of the irreversible nature of death. It would seem, at first glance, impossible to compensate people who have died prematurely for the harm experienced. Indeed, if we take an ex ante position (that is, before knowing individuals’ lifespans), it is impossible to identify with any precision who is going to die prematurely. The statistical information available necessarily refers to groups (e.g. life expectancy according to gender), while for the purpose of compensation we must know life expectancy on an individual level. In addition, if we take an ex post position (i.e. once the individual lifespans are known), it is generally too late to intervene and offer any compensation at all to the deceased. In this article, the authors show that despite these difficulties, it is possible to offer compensation to people who die prematurely. This compensation is arrived at by favouring consumption profiles that decrease with age. In fact, even if people with short lifespans are hard to identify in advance, we know with certainty that allocating more resources to younger people necessarily improves the lot of those unfortunate enough to die prematurely. In general, the saying “transfer the good things of life early in life, and the not-so-good things of life later” necessarily contributes to an improvement in the lot of those who die prematurely, despite the impossibility of identifying them in advance. The building of a more just welfare state, offering an insurance against early death, can occur through the application of this simple maxim.

Threshold Ages for the Relation between Lifetime Entropy and Mortality Risk

This article discusses the measurement of risk quantity in relation to life expectancy. Human beings are faced with a fundamental uncertainty as to their life expectancy: they know that are going to die one day, but do not know at what future moment they will die. Lifespan, that essential resource for realising one’s plans and dreams, is at the same time a resource whose available quantity cannot be known to anyone. It is one of the greatest uncertainties that we all face. Certainly, mortality tables allow us to calculate the probability of different lifespans, so the exact definition is a life-long situation of risk, rather than uncertainty. But that does not fundamentally change the problem: no-one knows when he or she is going to die. In an earlier article (“Human lifetime entropy in a historical perspective”, Cliometrica, 2020), Patrick Meyer and Grégory Ponthière quantified lifespan risk with the help of a Shannon’s entropy indicator defined in base 2. This indicator is the informational equivalent of life expectancy: instead of a mathematical expectation of age at the time of death, it is the mathematical expectation of the quantity of information revealed by a death event at a particular age. Shannon’s entropy measures lifespan risk in bits: it thereby renders the quantity of information revealed by a death event at a given age commensurable with the quantity of information revealed by a simple toss of a (bit)coin.

The paper “Threshold ages for the relation between lifetime entropy and mortality risk” studies the effect of mortality shocks such as epidemics on lifespan risk, measured by Shannon’s entropy in base 2. The authors demonstrate the existence of an age threshold, at which the sign of this effect changes. For France today, this age threshold is around 81 years. Before this age, a mortality shock increases risk for the lifespan being measured. After this age, the inverse is true, and a mortality shock reduces lifespan risk. The work shows that the effect of a mortality shock on the associated lifespan risk takes very different form depending on age. A mortality shock before 81 increases lifespan risk, while after 81, it reduces lifespan risk. This result sheds light on the effect of the epidemic on lifespan risk, an effect that is very important for predicting its economic consequences. As individuals are not neutral vis à vis lifespan risk, this asymmetrical change in lifespan risk according to age could result in varied reactions.

Is COVID-19 uninsurable?

Certain disasters, because they simultaneously affect a great number of victims, exceed the financial capacity of insurers and are thus excluded from insurance categories. This is the case for epidemics. Prudential rules, through their capital requirements, reveal well the impotence of standard insurances schemes. The lack of a historical record regarding certain risks does not help in making actuarial calculations. However, co-insurance – a sharing of risk among insurers in a sort of pool – improves global financial capacity and the level of industry information feedback.
The crisis linked to the coronavirus raises the question of pandemic risk insurance. The creation of a health catastrophe insurance scheme is under discussion. It is envisaged that the risk would be shared between the state and a pool of insurers. How such a pool would function must be carefully decided: the organisation of a pool via a broker with precise powers could cover a great number of risks. Even partial insurance would be better than the current lack of it entirely.
>> En français : télécharger le résumé complet (pdf)

Time for COVID parties?

In the face of the first wave of the COVID-19 epidemic, governments imposed lockdown measures that had heavy consequences for the economy and civil liberties, even though the virus has presented, until now, little risk for children and young adults. This research focuses on potential reactions among the young in the de-confinement period. Will they be tempted not to follow the social distancing rules, in a mixture of defiance of a policy that seems to sacrifice them, an individual desire to become immunised, and a wish to contribute to the collective immunity of the whole population? An original enquiry conducted in April 2020 with a group aged 18 to 35 years old, studies some key determinants in the exercise of social distancing: risk perceptions, social preferences and socio-economic conditions. This analysis will also contribute to current reflections on the potential benefit of age-differentiated distancing policies being considered in anticipation of the second wave of the epidemic.