Tuesday, March 31, 2020

The social cost of irresponsible behaviour



The entire world is grappling with covid-19 and India is no exception. The only potent medicine available against covid-19 is self-quarantine and lockdown. There can be a government order towards lockdown, but it also involves self-discipline on the part of the citizen. We have seen instances where people hid their travel history or behaved irresponsibly. Ultimately, such cases end firing up the spread of the virus. Some might feel that quarantine and lockdown are against their basic rights. They might wonder how their movements can affect others. We need to understand the negative externality involved in this process. The externality is a term used in Economics to deal with situations where the behaviour of one individual affects others even when they are not a direct part of this transaction. For instance, cigarette smoke affects people nearby adversely though they are not part of smoking. The smoker will claim that he has paid for the cigarette and now it’s no one’s concern if he smokes. Sadly, he is missing the harm he is causing to the non-smokers. What he has paid for a cigarette is the private cost. The harm done to others due to smoke is the damage to the society that is unaccounted in the price of a cigarette. The sum of damage to society and the private cost gives the social cost. We can use the same concept to explain why self-quarantine and lockdown are needed to stop the menace of covid-19.




The above diagram shows the divergence between the private and social costs involved in our social interactions (physical) in the time of corona menace. The downward sloping line shows the incremental benefits an individual receives from social interactions with others. The upward-sloping straight line shows the cost the individual bears when he makes social contacts. It could be the time spent in interactions/movements outside the home. Individuals like to interact so long as the benefit from it (blue line) is more than the costs involved. Since covid-19 is contagious, there is a harmful effect on others in the form of possible transmission of the virus, associated with our movements outside the home. It is the negative externality shown by the rapidly rising red curve. The rapid rise in the curve shows the contagious nature of the harm. The harm increases incredibly quickly in the 2nd and the 3rd stage. If we do not abide by lockdown now, we will be shut in the 3rd stage. In the 3rd stage, the benefits are below the costs to society line. Society, as a whole, will be completely shut down. Best is to respect lockdown while we are still in the 2nd stage. The virus spreads in a multiplicative way rather than an additive way. Imagine that Mr X is infected with coved-19 and the symptoms are yet to show up. He meets four other individuals, and three of these also became infected. These three additional infected individuals will interact with, say, four individuals each, and again the probability of passing the infection is 75%. He will end up infecting 12 additional individuals in just two steps of physical interaction.

All this could have been avoided had Mr X got himself tested and stayed at home. Now multiply this number of the countless number of interactions that might be taking place daily. One never knows who will be spreading this infection, and this can end up at our homes also. As a social responsibility, we should discourage those who defy the lockdown. Further, if one feels he has been compromised, one must get tested and follow proper quarantine if the test comes positive. Failing to do so will endanger our loved ones first. Remember, we work so hard for keeping them happy. How can we see them contracting such an infection!

The government has announced a relief package for the marginalized section. There are chances of significant leakages in the booster package. For example, in distributing the food grains, how will we take fingerprint now without fear of spreading the infection? One way out could be to video record all the distribution process at every targeted public distribution shop. It can also be combined with mandatory handwash before and after giving the fingerprint for grains.

The government should also issue e-pass to essential service providers, most importantly, the medical store retails. Failing to do it will discourage the retailers from replenishing the stock of medicines. Just imagine what would happen when there is no stock of diabetes or asthma medicines! It is also needed that the medical store wholesalers keep the supply going for the masks and sanitizers and other life-saving medications.

One may wonder, is there any other way we can help in this situation? Of course, we can. To begin with, everyone must refrain from spreading rumours. Please think twice before forwarding social media messages. Often, they create panic and confusion rather than helping people.

Though the government has the responsibility of helping the destitute, we must also play our part. Everyone should try to help the poor as much as they can and in ways they can. Our Honourable prime minister suggested one way in advising not to deduct salaries of household helps. One’s real character comes out in adversity. Would you like to carry the guilt of not helping someone in such trying times when you could have!

There is another solemn responsibility all of us have: To refrain from hoarding essentials. Please do not dump your house with supplies for the next four months. Have faith; things will change for the better. When we are hoarding the essentials, someone is going to miss their supplies. Now is the time to start thinking about society as one family. Remember that bad times never last forever, but how we behaved during it may become someone’s memory. What memory would you like your children to carry? I guess a good one. So, let’s be responsible and behave responsibly.
  
A video demonstration of the idea discussed here can be found here:
Importance of lockdown & social distancing in fighting Corona: An Economist's take

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