This paper offers a parsimonious, rational-choice model to study the effect of pre-existing inequalities on the transmission of COVID-19. Agents decide whether to "go out" (or self-quarantine) and, if so, whether to wear protection such as masks. Three elements distinguish the model from existing work. First, non-symptomatic agents do not know if they are infected. Second, some of these agents unknowingly transmit infections. Third, we permit two-sided prevention via the use of non-pharmaceutical interventions: the probability of a person catching the virus from another depends on protection choices made by each. We find that a mean-preserving increase in pre-existing income inequality unambiguously increases the equilibrium proportion of unprotected, socializing agents and may increase or decrease the proportion who self-quarantine. Strikingly, while higher pre-COVID inequality may or may not raise the overall risk of infection, it increases the risk of disease in social interactions.
I14, I18, D1, O12
Original Release Date: August 15, 2020
Department of Economics, Iowa State University
Bhattacharya, Joydeep; Chakraborty, Shankha; and Yu, Xiumei, "A Rational-ChoiceModel of Covid-19 Transmission with Endogenous Quarantining and Two-sided Prevention" (2020). Economics Working Papers: Department of Economics, Iowa State University. 20016.