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An Optimal Policy for Social Resources Allocation: When Outbreak of Infectious Diseases

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  • Shin, Inyong

Abstract

This paper analyzes the optimal policy for social resources allocation when outbreak of infectious diseases like the coronavirus. Infectious diseases not only pose a threat to human health, but also have a great impact on society and economy. There remains considerable disagreement between economists' views and medical experts' views, for example, a gradual steps policy vs. an immediate lockdown policy. This paper grafts the epidemiological model (Susceptible-Infected-Recovered model or SIR model) for the spread of infectious diseases onto an economic optimization model in order to reconcile the epidemic control and economic activity. This paper considers that we can control the infection rate and recovery rate through our efforts which are parameters in the SIR model, for example, self-quarantine, lockdown, increasing the number of hospital and medical personnel, developing vaccines, etc. This paper calculated the optimal resources allocation and the timing for the infectious diseases. This paper concludes the preventive measures should be implemented before the number of infected people increases (preceding) and the treatment measures should be implemented according to the number of infected people (coinciding). The modified model can be seen as a persuasive model considering the compatibility between epidemic control and economic activity.

Suggested Citation

  • Shin, Inyong, 2020. "An Optimal Policy for Social Resources Allocation: When Outbreak of Infectious Diseases," MPRA Paper 99936, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:99936
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    References listed on IDEAS

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    1. Jonathan Karnon, 2020. "A Simple Decision Analysis of a Mandatory Lockdown Response to the COVID-19 Pandemic," Applied Health Economics and Health Policy, Springer, vol. 18(3), pages 329-331, June.
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    Cited by:

    1. Huberts, Nick F.D. & Thijssen, Jacco J.J., 2023. "Optimal timing of non-pharmaceutical interventions during an epidemic," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1366-1389.

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    More about this item

    Keywords

    resource allocation; optimal policy; coronavirus; COVID-19; SIR model; infectious diseases;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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