To assess if physical distancing measures to control the COVID-19 pandemic can be relaxed, one of the key indicators used is the reproduction number R. Many developing countries, however, have limited capacities to estimate R accurately. This study aims to demonstrate how health production function can be used to assess the state of COVID-19 transmission and to determine a risk-based relaxation policy.
The author employs a simple “bridge” between epidemiological models and production economics to establish the cumulative number of COVID-19 cases as a short-run total product function and to derive the corresponding marginal product, average product, and production elasticity. Three crucial dates defining the states of transmission, labelled red, yellow, and green zones, are determined. Relaxation policy is illogical in the “red zone” and is not recommended in the “yellow zone”. In the “green zone”, relaxation can be considered. The Bayesian probability of near term’s daily cases meeting a policy target is computed. The method is applied to France, Germany, Italy, the UK, and the US, and to Indonesia as an example of application in developing countries.
This study uses data from the WHO COVID-19 Dashboard, beginning from the first recording date for each country until February 28, 2021. As of June 30, 2020, France, Germany, Italy, and the UK had arrived at the “green zone” but with a high risk of transmission re-escalations. In the following weeks, their production elasticities were rising, giving a signal of accelerated transmissions. The signal was corroborated by these countries’ rising cases, making them leaving the “green zone” in the later months. By February 28, 2021, the UK had returned to the “green zone”, France, Germany, and Italy were still in the “yellow zone”, while the US reached the “green zone” at a very high number of cases. Despite being in the “red zone”, Indonesia relaxed its distancing measures, causing a sharp rise of cases.
Health production function can show the state of COVID-19 transmission. A rising production elasticity gives an early warning of transmission escalations. The elasticity is a useful parameter for risk-based relaxation policy.
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