As COVID-19 ravages parts of the globe and threatens lives and economies, researchers from all disciplines race to understand the various impacts of the virus. Statistics Associate Professor, Xiaohui Chen and Ziyi Qiu, an Economist with Keystone Strategy and a Visiting Assistant Professor with the Department of Economics at Illinois are two such researchers revealing the real-world effects of COVID-19.
Chen and Qiu recently published an article on government policy interventions on the transmission of COVID-19 through the Centre for Economic Policy Research (CEPR). The article focuses on the effectiveness of non-pharmaceutical interventions (NPI’s) and their impact on economies through sampled countries. Using a dynamic panel SIR model, Chen and Qiu constructed different scenarios with data from nine countries across the globe. Running scenarios of the effectiveness of the most common NPI procedures -- school closures, mask wearing, and centralized quarantine – their findings were able to suggest how countries may avoid complete lockdown policies. Their research also dove in to additional findings of which countries may benefit from expanded NPI orders to better control the disease transmission and which countries may consider gradually lifting some NPI orders. Using publicly available data from the Center for Systems Science and Engineering (CSSE) at John Hopkins University, Chen and Qiu were able to determine that of the nine countries sampled -- Italy, Spain, Germany, France, the UK, Singapore, South Korea, China, and the United States -- that Singapore and the United States would be two of the countries that may benefit from expanded NPI usage. As multiple states within the US begin to loosen their Stay-In-Place or other quarantine orders we will be able to see in real-time the effectiveness of those initial policies.
Article citation: Xiaohui Chen, Ziyi Qiu. Scenario analysis of non-pharmaceutical interventions on global COVID-19 transmissions. Covid Economics: Vetted and Real-Time Papers, Centre for Economic Policy Research (CEPR), 46-67, Issue 7, 20 April 2020.
Founded in 1983, CEPR is a network of over 1,500 research economists working to promote excellent research and to influence key decision-makers with policy-relevant research and findings. CEPR’s guiding principle is ‘Research excellence with policy relevance’. Investigation on the economic effects created by the COVID-19 outbreak was the basis of the Covid Economics, Vetted and Real-Time Papers that CEPR focused on for their April 2020 issue. Articles presented in the publishing focused on explicit theory and/or empirical evidence to improve the knowledge base of the economic influence of COVID-19.
Since the original publishing and our initial interview, Chen and Qiu published an additional article through VoxEU, the web publication by CEPR to promote "research-based policy analysis and commentary by leading economists". Their second column further expands on their initial research findings presented in their first paper published through CEPR. The second article, COVID-19: Government interventions and the economy is posted here: https://voxeu.org/article/government-interventions-covid-19-and-economy
The Statistics @ Illinois News Group had the chance to review the original paper published by Chen and Qiu and (socially distanced) ask a series of questions based on that initial paper. What follows are those questions and their thorough responses. We greatly thank both Professors Chen and Qiu for their contributions to this article and their continued COVID-19 research.
Xiaohui Chen (Associate Professor at UIUC) and Ziyi Qiu (Economist at the Keystone Strategy) wrote the following replies to the interview questions jointly.
Statistics @ Illinois - News Group: What was the inspiration for approaching COVID-19 in regards to how NPI’s are utilized globally? How did you decide to explore the economic effects of NPI’s versus full lockdowns?
Xiaohui Chen, Ziyi Qiu: We have been closely watching the changes in government policies and the infection trends since the COVID-19 outbreak happened in Wuhan, China back to January 2020. We observe that different government intervention approaches have been imposed across countries which associate with different disease control outcomes. That inspires us to think if we can learn from each country’s policies by borrowing information across the globe to better understand their impact on the COVID-19 transmission so we can improve the appropriate NPI selections.
In our research, we looked at the economic effect of full lockdowns as well as the impact of additional NPIs including mask wearing, centralized quarantine, school closure, social distance, and travel restriction. Our goal is to understand the effectiveness of each individual NPI by using the variation of government policies across countries and regions, which can give us more data to quantify the effects and provide useful insights to choose the appropriate combination of intervention policies. Also, given that the lockdown policy can cause significantly negative consequences to the economies, including escalated unemployment rates and firms’ bankruptcies, it becomes imperative for us to consider the NPIs other than full lockdowns to find an economically affordable solution which can balance the virus transmission outcomes and the economic consequences.
S@I-NG: Several peak dates have passed since writing the paper, have your models held true or have you seen significant changes due to various influences (such as protests, disregard to NPI orders, etc.)?
Chen, Qiu: Our model shows consistent prediction with the observed peak dates in the 9 countries we studied. Although our paper did analyze the peak and the predicted infection trends under the observed NPIs across countries, we want to emphasize that our work does focus on scenario analysis, which is to understand how the virus transmission and economic performance outcomes could be changed if we were using different counterfactual NPI approaches instead of the observed ones. In another way to say that, we want to understand if we change the combination of NPIs, how the virus transmission outcomes can change and which combination of NPIs can reach an efficient disease control outcome while not causing significant negative impact to the economy activities.
Given that our focus is a counterfactual scenario analysis, the recent changes of NPI orders would not change our conclusion. We do find the recent changes in NPI implementations are indeed consistent with the empirical findings in our research. One of the major conclusions in our work is showing that mask wearing is effective in suppressing virus transmission and lockdown can be cautiously lifted when three other measures are in place simultaneously: school closure, mask wearing and centralized quarantine. Last month, we do observe several European countries as well as the U.S. ordered the mask wearing as an additional policy intervention measure, and are considering gradually lifting the lockdown policy, both of them are in line with our conclusions.
S@I-NG: Your paper suggest the US should implore additional NPI measures, however several states are bowing to the pressure of some people, with the likelihood of a second wave and relaxed NPI measures in various states, did your research and analysis provide a period of time that a stricter NPI measure should be put into place before we begin to see numbers drastically rise again?
Chen, Qiu: In our paper, we suggest the U.S. to implore additional NPIs including mask wearing and a centralized quarantine system to reach an efficient virus control outcome. We think that those policies should be imposed at the beginning of the outbreak to reach an efficient virus control outcome. In our paper, we also recommend not to use economically costly NPIs such as national lockdown policy as it can suspend most of the economic activities and increases the risk of pulling the economy into a recession. Our work suggests using “wiser” policies in the sense of imposing on additional NPIs that are effective and cost-efficient in control virus transmission, but not “stricter” policies in the sense of ordering everyone to stay at home and closing majority of economics activities. The point of our research is to identify economically affordable and effective NPIs to replace the economically costly ones to balance the conflicting objectives in virus transmission control outcomes and economic performance. We recommend using NPIs including mask wearing, centralized quarantine and school closure to replace the full lockdown, where the latter is likely to cause severe socioeconomic problems, to resolve both the epidemiological and economic concerns.
S@I-NG: Any final thoughts or remarks on the subject of NPI’s and the impact on the economy?
Chen, Qiu: Our empirical findings suggest that NPIs are effective in controlling virus transmission, including centralized quarantine, lockdown, school closure and mask wearing. Given the different degrees of economy distortions caused by those NPIs, our finding recommends using economically affordable NPIs to avoid the economically costly ones to reach similar virus transmission outcomes while minimizing the negative impact to the economy. Overall, our scenario analysis suggests that lockdown policy can be avoided if schools remain closed, everyone wears masks and there is a centralized quarantine system to separate the infected people from their household temporarily without significantly heightening the epidemic peak and meanwhile can substantially flatten the curve of the active COVID-19 cases to reach a non-epidemic regime.
Our paper provides useful insights for countries to choose the most appropriate NPIs in a timely manner to balance the desired goals between the economic performance and health consequence. Overall, our research recommends governments to re-evaluate the intervention approaches by using economically affordable policies to replace the highly economically costly ones without significantly heightening the epidemic peak. Taking into consideration the heterogeneity across countries, our research also encourages countries that are currently experiencing or may experience outbreaks in a future time to customize and adjust their own choices of government intervention policies. The research findings can provide useful insights for different countries and regions worldwide as well as provide useful insight for further pandemics.
Aaron Thompson 5/20/2020