Hasan Sheikh is an emergency and addictions physician and a lecturer at the University of Toronto who also holds a master’s degree in public administration from Harvard Kennedy School. Munir Sheikh is a research professor at Carleton University in Ottawa and a former chief statistician of Canada.
Ontario is entering another lockdown, mere weeks after restrictions lifted. Undoubtedly, we opened too early. The number of COVID-19 patients admitted to hospital when we eased restrictions in February was 10 times what they were when we reopened in the summer.
This is an obvious failure of public policy-making. But the real question is: Why did it happen?
Some will point to a failure of understanding public health. But most politicians seem to understand the importance of physical distancing, wearing masks and hand sanitizing.
Others will point to a failure of understanding economic policy. But it appears that leaders generally understand that there is no long-term trade-off between public health and the economy – that the cycle of lockdown, premature reopening, and lockdown is bad for both public health and the economy.
The true failure of our COVID-19 response is one of politics. It is rooted in the false belief that there is a “middle ground” policy that can balance restricting individual freedom, harming businesses in the short-term, and preventing the need to ration intensive-care unit beds and ventilators. That, plus the truism that politicians are scared of upsetting you – the electorate – have directed them down a path that harms public health, the economy and individuals.
This is a failure of basic behavioural economics. If politicians understood it, they would realize that their best chance of personal success and re-election is to lockdown once, and only once – and make sure it works.
Behavioural economics is a field that appreciates that human beings do not follow textbook economic theory in their day-to-day lives – that our complex decisions are affected by psychological, emotional and social factors, among others. One of the early and most powerful concepts in behavioural economics is “prospect theory,” which posits that our satisfaction and dissatisfaction is not linearly related to our gains or losses. Instead, human beings are affected by “loss aversion.” We feel the dissatisfaction of a loss more than the satisfaction we feel from a similar gain. Put another way, we are happier not losing $100 than we are if we gain $100.
Prospect theory also holds that we have a diminishing sensitivity to gains and losses. That means that we don’t get twice the satisfaction from gaining $100 than we do from gaining $50; we get slightly less. Similarly, we don’t get twice the dissatisfaction from losing $100 than we do from losing $50; we tend to be slightly less than twice as upset.
The implication is that people are happier when they separate gains and aggregate losses. You’re happier winning $50 twice than $100 all at once, and you’re happier losing $100 all at once than losing $50 twice. Hence the phrase, “Rip the Band-Aid off.” It’s best to aggregate your losses in a one-off instance of quick pain, because it’s better than drawing it out over time.
So, what does prospect theory tell us about the political response to COVID-19?
People are loss-averse. They’re going to feel public-health restrictions intensely. And it’s going to hurt, no matter what you do. The most compassionate answer is to aggregate those losses, ensure that those public-health restrictions work, and drive down cases as close to zero as possible.
Then, make sure you only reopen once, because if you do have to impose a second (or in this case, third) lockdown, the gains from reopening are less than the pain from the lockdown. Reopen only when you can ensure that your test-trace-isolate capacity is able to handle new cases and quickly isolate COVID-positive individuals and their contacts to prevent uncontrolled spread. That will mean harsher restrictions in the short-term, but fewer total lockdown days in the long run.
Both public-health and economic theory point in the same direction: toward a substantive, stricter and highly effective lockdown. But politicians appear to have misjudged the correct political answer, believing that multiple light closings would help their political fortunes when, in fact, the growing popularity of world leaders who have dealt with COVID-19 effectively has demonstrated that politicians can have it all: better public health, a faster economic recovery, and stronger political support. It just requires courage, and for politicians to overcome their own loss aversion when it comes to their jobs.
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