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Testing Policies During an Epidemic

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Abstract

I simulate a stochastic SIR-Macro model to study the effects of different testing policies to isolate and quarantine the infectious during an epidemic. I show that contact tracing performs better than random screenings, and than tests on a voluntary basis, only conditionally on having enough capacity to frequently process a large number of tests. Since the testing capacity is difficult to build in the short run through investments, I study the effects of two alternatives: group testing and the use of less sensitive tests. Both strategies, when combined with contact tracing, can significantly smooth the peak of the epidemic, ease the pressure on hospitals, decrease mortality and reduce the overall output loss. I also show that the gains are higher in case of an endogenous reduction of social activities in response to the epidemic.

Suggested Citation

  • Francesco Flaviano Russo, 2020. "Testing Policies During an Epidemic," CSEF Working Papers 591, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:591
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    1. Manski, Charles F. & Molinari, Francesca, 2021. "Estimating the COVID-19 infection rate: Anatomy of an inference problem," Journal of Econometrics, Elsevier, vol. 220(1), pages 181-192.
    2. David Berger & Kyle Herkenhoff & Chengdai Huang & Simon Mongey, 2022. "Testing and Reopening in an SEIR Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 1-21, January.
    3. Fève, Patrick & Assenza, Tiziana & Collard, Fabrice & Dupaigne, Martial & Hellwig, Christian & Kankanamge, Sumudu & Werquin, Nicolas, 2020. "The Hammer and the Dance: Equilibrium and Optimal Policy during a Pandemic Crisis," TSE Working Papers 20-1099, Toulouse School of Economics (TSE).
    4. Facundo Piguillem & Liyan Shi, 2022. "Optimal Covid-19 Quarantine and Testing Policies [‘Optimal targeted lockdowns in a multigroup sir model’]," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2534-2562.
    5. David Berger & Kyle Herkenhoff & Chengdai Huang & Simon Mongey, 2022. "Testing and Reopening in an SEIR Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 1-21, January.
    6. Maximilian Kasy & Alexander Teytelboym, 2020. "Adaptive targeted infectious disease testing," Oxford Review of Economic Policy, Oxford University Press, vol. 36(Supplemen), pages 77-93.
    7. Favero, Carlo A. & Rustichini, Aldo, 2020. "Restarting the economy while saving lives under Covid-19," CEPR Discussion Papers 14664, C.E.P.R. Discussion Papers.
    8. Joshua S. Gans, 2022. "Test sensitivity for infection versus infectiousness of SARS‐CoV‐2," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1880-1887, September.
    9. Callum Jones & Thomas Philippon & Venky Venkateswaran, 2021. "Optimal Mitigation Policies in a Pandemic: Social Distancing and Working from Home [A simple planning problem for covid-19 lockdown]," Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5188-5223.
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    More about this item

    Keywords

    Group-Testing; Tracing; Infection.;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • I1 - Health, Education, and Welfare - - Health
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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