Pandemic research: Economics project to explore impact of biases on social distancing

economics
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With neither a vaccine nor a proven treatment available, many communities are relying on social distancing to battle the coronavirus pandemic, from closing non-essential businesses to wearing masks in public. The problem: Not everyone agrees to follow these measures, seen by recent protests across the country.

A team of economists at Binghamton University, State University of New York is studying the phenomenon for a new research project on "The Role of Intertemporal Biases in Influencing Individual's Demand for Social Distancing." The project recently received funding through the SUNY Research Seed Grant Program.

The research team includes Assistant Professor of Economics Plamen Nikolov, Associate Professor of Economics Andreas Pape and Assistant Professor of Economics Ozlem Tonguc. They will be aided by an army of undergraduate economics students serving as research assistants—and who have an unprecedented opportunity to conduct economics research with human subjects in real time. Because the University has itself moved online in response to the pandemic, the researchers will gather data via online platforms, as well as phone surveys.

"Economists argue that individuals view health decisions, such as social distancing, as an investment," Nikolov said.

These decisions are forward-looking; you choose to endure something unpleasant today for a higher return in the future. A classic example of this from psychology is the Stanford marshmallow experiment in 1972, in which young children had a choice between taking a single marshmallow now or waiting 15 minutes and receiving two.

In terms of health, you make this kind of "costly investment" whenever you hit the gym instead of watching Netflix, drink water instead of soda or pick the carrot over the cookie, Nikolov explained.

But how much you choose to invest in your health depends on a number of factors: how long you expect to live in the future, how much you value the benefit you'll see long term versus immediate gratification and your willingness to tolerate risk.

The project will particularly consider the impact of cognitive biases, which are systematic errors in thinking that cause us to act repeatedly in an irrational way. Economists have documented different types of cognitive biases, including confirmation bias, the tendency to selectively interpret information that confirms our prior beliefs.

The research project will explore the role of perception-related biases on how people internalize the magnitude of risk from COVID-19. For example, people can have a hard time understanding exponential growth processes, seeing growth as more linear—which has real impact on how they perceive their risk from the pandemic.

"And since we think that individuals act rationally by comparing the benefits with costs, underestimating the costs has really powerful implications for what individuals decide to do," Nikolov said.

The study will also examine how people update their own beliefs in response to changes in risk where they live, and whether their news source or political beliefs play a significant role in decisions on .

From an economics standpoint, studying individual decisions during a pandemic will illuminate theory on how people assess and internalize risk, and how they decide to invest in their health, Nikolov explained.

"Individual behaviors are fundamental to individual health, especially in infectious disease. So we are hoping that by uncovering what truly motivates people in the context of the epidemic, we can inform current and future public policy by nudging one another toward wiser decisions and healthier lives," he said.


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Citation: Pandemic research: Economics project to explore impact of biases on social distancing (2020, May 14) retrieved 3 July 2020 from https://phys.org/news/2020-05-pandemic-economics-explore-impact-biases.html
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