Yesterday I interviewed QUT’s Professor Benno Torgler for my latest Economics Explained episode about a new paper he has co-authored: Certified Corona-Immunity as a Resource and Strategy to Cope with Pandemic Costs.
Professor Benno Torgler is Professor of Economics in the School of Economics and Finance and Centre for Behavioural Economics, Society and Technology (BEST), QUT. He was also Adjunct Professor at the EBS Universität für Wirtschaft und Recht, Germany (2012-2015) and an ARC Future Fellow (2011-2015).
Use these (approximate) timestamps to jump right to the highlights:
- 1:20 – abstract/overview of Benno’s paper – immune people must be identified and re-integrated into normal activities as soon as possible
- 5:15 – reference to my recent interview with CCIQ Chief Economist Marcus Smith on the economic impacts of coronavirus
- 5:40 – concept of Immunity Certificates
- 8:50 – what does Benno mean by actively producing the resource of corona-immunity?
- 11:55 – importance of widespread testing and the need to discuss trade-offs (e.g. public health and economy), prompting discussion of final sentence of abstract, “There is a risk that the impacts of the secondary crisis could outweigh that of the biological event from a health and societal perspective.”
- 13:40 – discussion of Frank Snowden’s book Epidemics and Society: From the Black Death to the Present
- 16:40 – reference to post-September 11 study which showed driving deaths increased following terrorist attack which led to less air travel by Gerd Gigerenzer, Out of the Frying Pan into the Fire: Behavioral Reactions to Terrorist Attacks
- 21:00 – reference to Paul Frijters’ Club Troppo articles on the virus – e.g. The Corona Dilemma
- 23:45 – Benno mentions Rizio and Skali paper on How often do dictators have positive economic effects?
Queensland Economy Watch 
Benno Torgler’s paper is an interesting one (from a skim read). I really like the idea of ‘certification’. This provides an alternative (or possibly complementary) policy approach to gradual regional lifting of restrictions when they do occur. I think this particularly needs to be explored more.
There is some scientific evidence to suggest people that have already recovered from Covid 19 can still carry (and presumably spread) the virus, at least for a while. This will make ‘certification’ a challenge (read legal nightmare). https://jamanetwork.com/journals/jama/fullarticle/2762452
And to be eligible for a ‘certificate’, presumably you have had to have actually recovered from the virus. To my understanding, a ‘negative’ test means you currently don’t have the virus. It does not mean you are have had the virus and are therefore immune. To date only 2,800 people in Australia have tested positive and fully recovered (i.e. would quality for ‘certification’). Many more have been tested, but most simply haven’t had the virus yet, so they wouldn’t be eligible for a ‘certificate’. So the only way for this policy idea to make a material impact in getting people back to work is to undertake mass testing to identify and certify the full cohort of recovered cases. There is a big transaction cost here, even setting aside the absolute constraints on testing kits and lab capacity.
What we have here is a policy proposition with a new set of trade-offs from the dominant policy position. More people back into the workforce more quickly (a good thing), while potentially more people out and about spreading the virus if the certification isn’t robust (not a good thing). It deserves greater research, and as always, the economists should be working with the appropriate scientists to make sure unintended consequences aren’t the legacy of adopting the policy idea.