Working Paper: CEPR ID: DP15595
Authors: Timo Boppart; Karl Harmenberg; John Hassler; Per Krusell; Jonna Olsson
Abstract: We formulate an economic time use model and add to it an epidemiological SIRblock. In the event of an epidemic, households shift their leisure time from activitieswith a high degree of social interaction to activities with less, and also choose towork more from home. Our model highlights the different actions taken by youngindividuals, who are less severely affected by the disease, and by old individuals, whoare more vulnerable. We calibrate our model to time use data from ATUS, employmentdata, epidemiological data, and estimates of the value of a statistical life. There arequalitative as well as quantitative differences between the competitive equilibrium andsocial planner allocation and, moreover, these depend critically on when a cure arrives.Due to the role played by social activities in people's welfare, simple indicators suchas deaths and GDP are insufficient for judging outcomes in our economy.
Keywords: No keywords provided
JEL Codes: E10; I10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| epidemic (I12) | household time reallocation (D15) |
| rational expectations (D84) | utility loss during epidemic (I12) |
| social planner's optimal allocation (D51) | utility loss during epidemic (I12) |
| timing of cure's arrival (C41) | social planner's strategy (P21) |
| value of statistical life (J17) | social planner's strategy (P21) |