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Testing alone is insufficient

Rahul Deb (), Mallesh Pai (), Akhil Vohra () and Rakesh Vohra ()
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Rahul Deb: University of Toronto
Mallesh Pai: Rice University
Akhil Vohra: University of Cambridge
Rakesh Vohra: University of Pennsylvania

Review of Economic Design, 2022, vol. 26, issue 1, No 1, 21 pages

Abstract: Abstract The fear of contracting a serious illness caused by a contagious disease limits economic activity even after reopening. Widespread testing alone will not alleviate this problem. We argue that targeted testing in concert with targeted transfers is essential. We propose a model with these features to determine where agents should be tested and how they should be incentivized. Agents with a low wage, a high risk of infection, and who bear a large cost of falling ill should be tested at work. When testing is very costly, agents with high wages and low expected costs associated with falling ill should be tested at home.

Keywords: Epidemics; Mechanism design; COVID-19; Health policy (search for similar items in EconPapers)
JEL-codes: D04 D62 I18 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10058-022-00295-6

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