Behaviour, Blog, Economic Theory, Government, Health
Comments Off on Heavy-handed Westminster diktats have eroded trust — now only localised Covid policy can restore it
Last month, the official group of scientific advisers — SAGE — warned the government that only a quarter of those who need to self-isolate due to coronavirus symptoms were in fact doing so.
This illustrates a concept which is of great practical importance: namely the conflict between individual and collective rationality.
Consider Margaret Ferrier, an SNP MP (who has since had the whip removed) who travelled by train from London to Scotland despite knowing she had tested positive for Covid-19. Better for her personally to be at home in Glasgow than stuck in a London hotel for a week, but worse for society as a whole as she risked spreading the virus to everyone on the train with her.
The textbook model of economics neatly sidesteps this potential problem. It sets up an idealised situation in which there is no conflict between individual and collective rationality. The task is then to discover what assumptions about behaviour are needed to be compatible with such an outcome.
It is a very challenging question, and several of the early Nobel Prizes in economics were awarded for work in this area.
Economics itself has moved on in recent decades and pays much more attention to the potential rift between what is good for the individual and what is good for society.
One of the most influential thinkers in this area is Elinor Ostrom who received the Nobel prize in economics only three years before her death in 2012. Her work is very relevant in the Covid crisis.
Her doctoral dissertation was on how farmers and others in Southern California solved the problem of water management in their local area. For individuals with favourable locations, it was rational to grab as much water as they could. But collectively, this was a bad outcome. Others would be short of water.
The key feature of Ostrom's work was to show that individuals were capable by their own actions of avoiding conflicts of individual and collective rationality. It was not necessary to have a heavy-handed regulator trying to impose a solution from above.
Like the Nobel laureates before her, she basically worked out what assumptions were needed for this to happen.
An essential element is that those involved must have some feeling of being part of a group. Further, disruptive and self-serving behaviour should be speedily identified and punished, in ways which are seen to be fair within the group. People also need to feel a sense of ownership of any restrictions which are asked of them.
When Boris Johnson announced lockdown on 23 March, in effect the nation was the group. For a period, most people behaved with proper regard to others.
The subsequent maze of complex and often contradictory diktats issued by health bureaucrats and politicians since then has eroded much of this trust.
Countries such as Germany which had locally based Covid strategies from the outset have fared much better than the centrally planned attempts in the UK, in part because they have been able to maintain this trust and sense of community.
At long last, the UK government shows signs of being willing to trust local authorities to do what is best for their area — in the form of local lockdown rules. They may still get it wrong, but local autonomy on Covid policy at least gives the chance of restoring the trust which is essential to any successful strategy.
As published in City AM Wednesday 14th October 2020
Image: icsilviu via Pixabay
Following the science? This government lacks a basic grasp of the scientific method
Behaviour, Blog, Experts, Government, Health
Comments Off on Following the science? This government lacks a basic grasp of the scientific method
Verification and validation. It is hard to imagine a more nerdy phrase.
But it is, in essence, how science makes progress. It is what we have to do to check whether a scientific claim or theory is correct.
And it has been seriously neglected during the Covid-19 crisis.
Just over a century ago, for example, Albert Einstein revolutionised the world of physics with his general theory of relativity. The verification part of the process was to check that his high-powered maths did what he said it did.
Einstein claimed his theory was superior to the very longstanding one of Isaac Newton. This had to be validated by confronting it with real world evidence before it was believed. Some of the tests were pretty esoteric, involving things like fluctuations in the orbit of Mercury. But Einstein's theory passed with flying colours. It was both verified and validated.
Last week, Matt Hancock, the secretary of state for health, claimed that without the new lockdown measures there could be "hundreds of thousands of deaths".
A quick but effective piece of validation shows the scientific model on which this is based is most unlikely to be true.
The evidence now suggests that, at the peak of the epidemic in late March/early April, there were around 100,000 new cases each day. Total deaths in these months were around 40,000.
So to get "hundreds of thousands" of deaths — which means at least 200,000 — simple arithmetic shows that there would have to be a minimum of half a million new cases every day.
We can add to this calculation the combination of better knowledge of how to treat the virus and the continued shielding efforts of the most vulnerable, which have caused the death rate to fall sharply.
If Hancock's claim is correct, there would have to be a million new cases a day at a second peak.
Even Chris Whitty and Patrick Vallance in their horror slideshow last week only felt able to claim 50,000 cases each day.
But the gloomy pair appear to have ignored the basic principles of verification and validation way back in February and March.
The lockdown was triggered by the predictions of Neil Ferguson and his team at Imperial College. Unless it was introduced, they projected, there would be 510,000 deaths.
Almost as soon as it was published, a range of scientists raised questions about verification of Ferguson's model. Did the computer code do what was claimed? Ferguson himself tweeted "I wrote the thousands of lines of undocumented code 13+ years ago to model flu pandemics". For many weeks after it was not available for scrutiny.
It was rapidly pointed out that the model did not allow for any change in behaviour. In the face of a pandemic, it assumed that people would carry on behaving exactly as they had always done — hardly consistent with the evidence of how people really do behave in these circumstances. Yet this was the basis for the lockdown restrictions we have seen over the past six months.
Verification and validation: boring words indeed. But their neglect by the government's advisers has saddled us with the enormous social and economic costs of lockdown.
As published in City AM Wednesday 7th October 2020
Image: COVID-19 testing by Tom Wolf via Flickr CC BY 2.0
And this week's winner for the Stupid Scientist award is…
Behavioural Economics, Blog, expert views, Government, Health, Science, Uncategorized
Comments Off on And this week's winner for the Stupid Scientist award is…
Scepticism about the advice given by government scientists about Covid-19 is rising sharply.
In areas like Bolton infections are high. Interviews with the locals reveal that so, too, is disbelief in the veracity of the statements made by members of SAGE, the government science advisory group.
The scientists, rational beings themselves, may ascribe this to the inability of the general population to process information.
Yet it is their own pronouncements which have fostered scepticism. Scepticism in turn brings reluctance to follow advice, even when it is good.
Which brings us to the winner of this week's Stupid Scientist award. It is a close-run thing, but step forward Nicola Steedman, Scotland's deputy chief medical officer.
Students at universities in the Glasgow region are effectively being held under house arrest in their halls of residence. According to this particular Nicola, it is for their own good. The students are apparently at serious risk of dying from coronavirus.
If we turn to the data to see how many people under 30 have died from Covid in Scotland since the pandemic began, the number is in fact zero.
Given this, why should any credence be given to anything which Ms Steedman now says? There have been zero deaths amongst student-age groups, yet she appears to believe that they are at serious risk of death.
Runners up for the award are the well-known duo of Chris Whitty, chief UK medical officer, and Patrick Vallance, chief scientist. They pronounced there could be 50,000 cases of Covid a day by mid-October. If cases doubled every week, they would reach this level.
This projection has attracted widespread criticism. New cases have indeed risen in countries like France, Italy and even Germany, but at a rate which is much slower than doubling every week.
The real issue is the dog that did not bark. Not so much what they actually say, but what they do not say.
In France and Spain, for example, during September the number of new daily cases exceeded the previous peak levels reached in April. In France, the daily total reached 16,000 last Friday, double the highest level of April.
Surely the cemeteries and crematoria should be full to bursting?
But they are not.
In France, new cases have exceeded the April maximum since the beginning of September. At the end of the month, deaths are only one tenth of their April peak level.
In Spain, deaths reached a quarter of the April peak for a couple of days and are now falling sharply.
In Italy, daily deaths remain in very low single figures.
In the UK, too, deaths have risen but are very low compared to the total number of new cases.
The whole thrust of the messaging from pro-lockdown public sector scientists and bureaucrats is negative. Some may think this is because of the incentives they face. The bigger the threat the virus apparently presents, the more their importance and influence grows.
In my view, this is unduly cynical. But it is a cynicism which seems to be prevailing amongst the people of Bolton and other afflicted areas.
As published in City AM Wednesday 30th September 2020
Image: Chris Witty and Patrick Vallance by Number 10 via Flickr CC BY-NC 2.0
Behavioural Economics, Blog, Government, Health, Uncategorized
Comments Off on Incentives are a better way to tackle Covid-19 than blanket lockdowns
A great deal of government policy during the Covid crisis has involved regulation. Given a choice, economists usually prefer to use incentives. Altering the relative costs and benefits of an action is a well-established way to alter behaviour.
Perhaps the government has been listening. A big stick will now be waved at people who fail to self-isolate when they ought to: breaking this regulation can be punished by a fine of up to £10,000.
The size of the penalty seems large enough to deter people from going out and about when they should be staying at home. The case in favour of the policy seems open and shut.
However, the fine alters another incentive in the test and trace regime. The bigger the fine for breaking the rules, the less likely it is that people will supply the correct contact information in the first place.
Which of these two incentives will predominate is a purely empirical matter and one which is hard to predict in advance. Both undoubtedly exist, and the impact on the test and trace system remains to be seen. But it may just blow the scheme out of the water.
We do not know the source of the proposal within the machinery of government. SAGE, the scientific group which has been advising the government during the pandemic, has no economists as members. But there are well over 1,000 economists working directly for the Government Economic Service. Have none of them made this obvious point to ministers about the different incentives?
On a more positive note, vulnerable groups have responded well to incentives created by the information which has emerged about the virus. No less than 89 per cent of all Covid deaths occur in the over 65 age groups. Even more pertinently, those with pre-existing medical conditions account for 95 per cent of all Covid mortalities.
There is a strong overlap between these two groups. Many of these individuals have altered their behaviour dramatically. They are shielding. As a result, total deaths remain low given the number of infections.
German has experienced less than a quarter of the number of deaths as the UK. Its case fatality rate – the percentage who die once they catch the disease – among the elderly is the same as in the UK. The Germans have simply been much more effective at preventing the elderly from catching it in the first place.
An absolutely crucial part of any strategy is to try and keep the virus out of care homes. It is not possible for the very elderly in care homes to change their behaviour. Their environment is decided for them.
Care homes already have the incentive of reputational risk to avoid the virus spreading. But it must be worth reinforcing this with a public policy of substantial monetary incentives for those homes which are able to remain virus-free.
Whatever the incentive structure might be, a more subtle and targeted approach is needed than that of blanket lockdowns. These simply generate huge social and economic costs, with little in the way of overall health benefits.
As published in City AM Wednesday 23rd September 2020
Image: Self Isolating sign by Tim Dennell via Flickr CC BY-NC 2.0
Coronavirus fatality rates are way down – why has the government not taken this on board?
Blog, Economy, Government, Health
Comments Off on Coronavirus fatality rates are way down – why has the government not taken this on board?
King Canute has had a bad press. The monarch sat on the beach on his throne with the deliberate intention of demonstrating to his courtiers that he could not stop the waves from coming in.
But in popular thinking, he is the deranged king who believed he could control the sea.
In this spirit, step forward two modern Queen Canutes, Nicola Sturgeon and Jacinda Ardern of New Zealand. Both appear to think they can eliminate Covid-19.
Our own Matt Hancock is showing dangerous signs of succumbing to this syndrome.
On a more sober note, it is certainly true that new cases are rising not just in the UK but across Europe – except in Sweden.
But there are major differences between this wave of infections and that experienced in March and April.
The key question is not really how many people might get Covid-19. It is how many might die as a result. In the jargon, this is the case fatality rate (CFR), the probability of dying from the disease if you catch it.
As ever, the Oxford Centre for Evidence Based Medicine is a font of wisdom.
A month ago, the Oxford researchers showed that in the UK the CFR had fallen from six per cent in the summer to just 1.5 per cent.
This could of course be due in whole or in part to the fact that the majority of infections are now in the young, who are at essentially no risk at all themselves.
But the Oxford group showed last week that something even more important is going on. They analysed data from Germany, which is more detailed and specific in terms of ages than in the UK. The results are striking.
In the 60 to 79 age group, in the March and April period the CFR was nine per cent. By July and August this had fallen to just two per cent.
In the very vulnerable group of the over 80s, in March and April the CFR was a frightening 29 per cent. By July and August this was down to 11 per cent.
So deaths remain very low not just because it is mainly the young now catching Covid-19 or because the elderly are shielding. Both of these are true.
More fundamentally, fatality rates amongst those who actually have the virus have fallen sharply. Treatment has improved. Social distancing means less strong doses are being caught. Whatever the reason, CFR is down.
Government advisors and health care professionals appear not to have taken this on board. They speak and act as if a second wave will be as lethal as the first.
Some might think they are as mad as the King Canute of popular legend. It is more likely that they are simply suffering from confirmation bias.
This is the tendency to search for, interpret, and recall information in a way that confirms or supports one's prior beliefs or values.
They have long thought that a second wave would be devastating. The emerging evidence should not be allowed to get in the way of this. Their irrational behaviour is costing us all dearly.
As published in City AM Wednesday 9th September 2020
Image: Covid Testing by via GiiPe via Wikimedia
On coronavirus, governments have been the most irrational of us all
Behaviour, Blog, Government, Health
Comments Off on On coronavirus, governments have been the most irrational of us all
Decisions, whether by individuals, companies or governments, are often made with imperfect and incomplete information.
This is so obvious as to hardly seem worth stating. But for well over a century economic theory assumed that decisions were made with complete information. Economists knew full well that this was not always the case. The problem was that building a formal model without this assumption was a formidable task.
It was solved in the late 1960s by the American economist George Akerlof. His paper, the enigmatically titled "Market for Lemons", won him the Nobel Prize. The article is probably the most cited in the entire history of economics.
The coronavirus crisis provides an almost textbook example of how different amounts and quality of information affect the decisions which are made.
In March, initial data from China suggested the death rate was between three and four per cent, a real pandemic. The chaos in the health system in northern Italy was a prominent feature in the media.
Little wonder that, against Boris Johnson's libertarian instincts, a compulsory lockdown was introduced. Little wonder that people reacted with fear to the virus.
Six months later, whilst there is still much to discover about Covid, far more is now known.
It is well established that almost everyone who has died had some serious pre-existing health condition. Perhaps even more importantly, virtually no-one under the age of 40, or even 50, has died.
Many people have reacted to this information in an entirely rational way.
Those who perceive themselves as being either elderly or having a health problem continue to shield. The young see they are at essentially no risk at all and start to behave as they did before the virus appeared.
In Scotland, for example, it seems that around half the new infections are in mere whippersnappers under the age of 25. More generally across the UK, although the reported number of new cases is rising, hospital admissions remain very low because new infections are concentrated amongst the young.
These behavioural responses have arisen entirely spontaneously as the quality and quantity of information has improved. Many have weighed the costs and benefits in the light of this information and have made rational decisions.
The idea that people would change their behaviour during a pandemic was of course almost entirely absent from the mathematical models used by epidemiologists. It is this which led to absurd predictions both of half a million deaths in the UK in the first place and of fears of a second wave with even more deaths.
Some individuals who are at little risk remain paralysed by fear. They are still relying on outdated information and so behave in non-rational ways.
But it is governments which right now are the least rational of all. Nicola Sturgeon wants to eradicate Covid when even New Zealand, a country which can seal its borders, could not.
And governments persist in incurring the costs of lockdown, when people have shown that they are capable of behaving in sensible and rational ways without government interference.
Image: Closed Due to Covid-19 Sign by via Pixabay
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