• The containment and treatment of infectious diseases like Covid-19 are highly dependent on individual decision-making.
  • Individuals are not always rational and will balance the perceived benefits of making contact against the perceived cost of the disease.
  • The most effective response to outbreaks, such as Coronavirus, will take these behavioural insights, including the impact of panic on individual decision-making, into account.

Infectious diseases have shaped economics for centuries – think about the Black Death, plague, cholera, Spanish flu and SARS. The new coronavirus (Covid-19) will most probably be added to this list and become part of our collective memory as an event that shaped societies and economies.

To most people, experts and non-experts in the field, the economic risks and consequences of outbreaks, pandemics and epidemics are clear and tangible: the cost for health systems, disruption and reduction in labour productivity, decreased trade and decline in travel and tourism, to name just a few. However, if one had to look at news titles and pictures shared across the globe, one would identify a fundamental multiplier factor: panic – a level of distress beyond the “toilet paper panic” seen in Hong Kong, Singapore or, more recently, in Italy.

Epidemic risk management is by itself a highly complex task, where sets of measures need to be put in place and coordinated at local, national and international levels in order to minimize health and economic consequences. This complex and monumental task does not benefit from panic or extreme worry among citizens; this should be controlled and reduced as much as possible. Even Italy’s Prime Minister Giuseppe Conte first asked the public to “stop the panic”, then to act responsibly, when scenes of hundreds fleeing Milan surfaced – living proof that there is more to be understood and more that can be done in managing health (and many other) shocks

One helpful set of tools are “behavioural insights”, a collection of contributions from various disciplines of behavioural sciences (such as behavioural economics, social and cognitive psychology and anthropology), that can be used to inform public policy.

Public health is a public good and as any economist would tell you, this is always problematic. A public good is defined as a good from which everybody can benefit, even those who have not contributed to its creation (the so-called “free riders”). Normally, health decisions for non-communicable diseases are self-contained and personal (eating healthily, exercising, stopping smoking, going to a screening exam in order to avoid or detect disease).

Infectious diseases are a notable exception as individual decision-making is no longer self-contained or personal, but rather becomes a community matter. If you are contagious and do not protect others or are healthy and do not protect yourself, for example, you could be co-responsible for an outbreak becoming a pandemic.

In other words, when facing infection control interventions, individual behaviour is critical not only for the self but for society as a whole.

What measures are the British public taking?
What measures are the British public taking?

If individuals were entirely rational, the management of any communicable disease would be easy and straightforward: prevention, protection and containment would be implemented effortlessly and efficiently.

Unfortunately, we are not rational as experts used to think, but instead, use mental shortcuts which affect how we perceive most aspects of infectious diseases. The limits to human rationality are further exacerbated under strenuous conditions, such as fear.

It is clear that, when public health authorities have to face outbreaks, the Achilles heel is a proper understanding and representation of “real” human behaviour in policies and interventions. Getting people to cooperate towards the goal of containment (self-imposed quarantines, washing hands, limiting travel and gatherings), reducing number of free-riders (hand-sneezers, employees going to work even if sick) to a minimum and avoiding extreme risk perceptions (panic and dismissal) is as important as closing schools and increasing the number of beds in intensive care.

Nevertheless, this is not a trivial task and behavioural experts can explain why. For example, the likelihood of infections and associated health risks can be over or underestimated. People find it very difficult to process representations of risk, especially if these are expressed in odds, percentages and probabilities, but also when these are represented with adjectives (such as “rare”, “common” or “minor”), owing to the inherent ambiguity of these words. This leads to divergent interpretations, often very far from the intent of the communicators.

Furthermore, people are subject to the availability heuristic (the tendency to rely on immediate examples), an unconscious mental shortcut that can be highly misleading in the estimation of the probability of an event. In other words, if you have been bombarded by sensationalist news titles and powerful images of Coronavirus and then must face its threat, these images will come to mind first and will serve as an unconscious shortcut for your decision-making.

How does the coronavirus compare to other diseases?
How does the coronavirus compare to other diseases?

Italians, like many others around the world, have since early January been exposed to images of unhygienic wildlife markets, bat soup, face masks, hazmat suits, quarantined ships and other apocalyptic scenes. It is not surprising that when a little village in Lombardy was singled out for an outbreak of the Coronavirus most northern Italians felt a surge in panic and the sudden need to stockpile pasta and tomato sauce. Our subconscious has been fed with danger warnings for weeks and our mental shortcuts, so important for the survival of the fittest in the past, have worked just as intended, but not in the ways needed for the common good.

The issue is not just the content of message communicating a risk (hint: graphic information is generally best), but also involves the timing, medium and messenger. For example, if trust in the government is low, it will also be low in information delivered by governmental medical experts.

When the risk is overestimated the situation can be perceived as extreme and panic might set in. This can lead to instances where individuals ignore social conventions and tend to act in an extremely selfish way, such as looting. On the other hand, in extreme conditions people also tend to act extremely altruistically, helping others in chivalrous ways or punishing those who selfishly take advantage of the situation, for example, reporting price gouging to the authorities.

What is the World Economic Forum doing about the coronavirus outbreak?

Responding to the COVID-19 pandemic requires global cooperation among governments, international organizations and the business community, which is at the centre of the World Economic Forum’s mission as the International Organization for Public-Private Cooperation.

Since its launch on 11 March, the Forum’s COVID Action Platform has brought together 1,667 stakeholders from 1,106 businesses and organizations to mitigate the risk and impact of the unprecedented global health emergency that is COVID-19.

The platform is created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.

As an organization, the Forum has a track record of supporting efforts to contain epidemics. In 2017, at our Annual Meeting, the Coalition for Epidemic Preparedness Innovations (CEPI) was launched – bringing together experts from government, business, health, academia and civil society to accelerate the development of vaccines. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.

Panic doesn’t just set in because of risk (mis)perceptions, however, but also because individuals perceive a lack of escape routes. Lockdowns and quarantines represent exactly that: the closing down of an escape route. People fleeing Wuhan before it was put under lockdown, but also those who escaped quarantine by picking locks or running away in the middle of the night from red zones in Italy, did not see the measures as a fundamental instrument to eliminate their ability to carry and transmit the disease (a public good), but as a costly limitation to their freedom. The individual cost of anti-social behaviour (quarantines, maintaining a distance from others) is often considered too high, especially if it requires separation from loved ones.

When it comes to economics, in cases such as outbreaks of coronavirus, individuals balance the perceived benefits from making contact against the perceived cost of the disease and this affects transmission rates. The behaviour of some can expedite the disease’s spread, while the actions of others can slow epidemics. Once we acknowledge the power of individual behaviour in epidemics taking behavioural insights into account will not be a choice but a necessity.

For further reading:

Perrings, C., Castillo-Chavez, C., Chowell, G. et al. Merging Economics and Epidemiology to Improve the Prediction and Management of Infectious Disease. EcoHealth11, 464–475 (2014). https://doi.org/10.1007/s10393-014-0963-6