« Freakonomics Radio

409. The Side Effects of Social Distancing

2020-03-19 | 🔗

In just a few weeks, the novel coronavirus has undone a century’s worth of our economic and social habits. What consequences will this have on our future — and is there a silver lining in this very black pandemic cloud?

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For economics. Radio sponsored by bear progress is a human and mentioned? We look at our world and imagine how to make it better. It bear scientists developers working with farmers to help shape the future of agriculture like farms were crops and wildlife thrive together in new digital. Tools that allow farms to use less water, land and energy it science for a better life from bear. More about how there is shaping the future of agriculture. Visit crop science, dot bear dot, com. Fr Economics, radio sponsored by bear progress, is a human and Mentioned we look at our world and imagine how to make it better. It bear scientists developers working with farmers to help shape the future of agriculture like farms were crops and wildlife thrive together in new digital, tools that allow farms to use less water, land and energy. It science for a better life from bear,
more about how there is shaping the future of agriculture. Visit crop science, dot bear dot com. After a relatively slow and scattered response to the global pandemic, known as covered nineteen, the? U S in the past week assumed what is essentially a wartime footing the primary focus On curtailing the spread of the virus and creating I said to treat those who contract it to accomplish this. We ve been encouraged, three hundred and thirty million of us to keep to ourselves as much as possible practice, known as social distancing school and universities have been shut down along with cultural, religious institutions, restaurants and much more the same, sporting events, theatres conventions in any other large public gatherings. Many office buildings have emptied out
with employees ordered to work remotely travel, especially he's and trains is being severely diminished. All this has result in the biggest disruption of daily life than many of us have ever known, and it will last for weeks perhaps months? Will it success? It contain the spread of covert nineteen will find out. Hopefully it will at least be minimized. If we listen to the public health people, religious in the epidemiologists, and we should because they ve been dreading in studying this kind of pandemic. For years they say this we will get substantially worse in the? U S before it gets better and what other effects and after effects. Will this social distancing produce there will be many consequences and certainly some unintended ones would anyone surprise, for instance, to see a baby boom starting around nine months. From now entire industries and said
of our society are being abandoned, the economic impact will be massive. Obviously, some people stand to be hurt badly. Others are more protected and some it benefit, including those who can entertain and deliver and sell to the millions of people we suddenly a few This is to go not much to do, but the over all economic impact will be hugely negative and will likely require a massive infusion of government aid. Everything from industry bailouts too, in tax relief to emerge, The aid for laid off workers, the stock markets, fell thirty percent with one the harrowing single day drop of ten percent in another twelve percent, volatile these higher than has been since the financial crisis of two thousand eight. Now to be fair before the cove at night, pandemic began, apparently who on China? The? U s more.
Gets were at an all time high in part of the drops could be attributed to another huge market disruption, sort of thing, de under the radar, an oil price war- between Saudi Arabia, in Russia. The fact is, there are a lot of things flying under the radar right now. A lot of consequences that make I'm out of the global response to coordinating so we thought we'd called Few economists, whose past research, gates. They might have some insights into the future. Its being crafted right now by The extraordinary changes were all living through, they are Nicholas Bloom. Professor of economics, at Stanford University, Bloom studies, nah MC uncertainty and the management of firms. Also I'm Toby Moskowitz, I'm a professor of fine economic said yell University, and I study financial markets and sports and finally,
My name is Marshall Burke, I am an economist at Stanford University, I'm an environmental economist. So I study how changes in the environment shape, arrange a few Malcolm's health outcomes, economic outcomes, livelihoods more broadly, we'll talk about the sudden spy in working from home and online learning about this super volatile stock markets and believe it or not one silver lining in the black pandemic cloud. All that's coming up great after this I'm fine friends, stature and Gunnar projections. This is great economic radio broadcasts and explores the inside of everything. Here's your home Stephen definite
start with an overview of the economy itself in the aid, of covert nineteen years Nick Bloom. So there are two: things I think are happening now. First is theirs, curly Mendous negative shall come both demand and supply in a busy the shopping, downtown transportation tourism is pulling. So that's what the fuss made me the fact we know for sure that's bad news, but that's the second factor thrown on top of that which has incredible uncertainty in particular, left tail risk. What is left tail risk mean please left I'll risk is very add outcomes so risk and, in theory, be on both the good side in the bad sides of his upside risks. Downside risks the cove at nineteen, really only has oversleep downside risk. I talked to see anything good coming out of this and this additional uncertainty. Historical is turned out to be really costly for the economy, because business is poised, hiring or investing so
it becomes in saying I suspect, were not already into recession how bad it will be as hard to tell you know. Some of the latest work and academia is about network effects, nets, Toby, Moskowitz, so I'll, take the NBA who just postponed the season, the vendors, the suppliers, all the periphery industries, including people that Euro work at the stadiums, taxis, hotels, they're, all gonna, be affected by the civil. Do that trickling affect happen as well? I wonder if you could talk fermented about the difference between being right now, salaried full time employ verses, being an hourly or non salaried worker, and how in it strikes me that that may be a huge split by location that one classes can do much better than the other? Am I wrong on that are right on that? You write so, on the one hand, as folks sly, Romania that are on a salary and encounter relax in some senses, and we have all
As a Finn, I issues with our kids and health risks, but at least we're not worried losing our income and then on the other hand, the are only pay that I think life is so thankfully harder yet still for because they voted the guy work, which put some higher exposure risk when the recession happens, they're the ones easiest for the firms to lay off can use think of an example from history, their recent or distant of how, in a case like this, where workers especially the most vulnerable workers have the rug pulled out from under them. It's where government and or private firms responded well to this problem. Coming on When you look at recessions, generally, they'll, lower, skilled, lower pay do much worse when have the being a good response. I am scratch my had to think about him in there are things like forward on the five dollar a day which was famous in the thirties stepped in to guarantee because you know an honest living wage enriched
in times of in the last twenty thirty years at she. Labour markets have generally been moving too would be more flexible and said, become easier for firms to lay people off the tickly alley. Workers, in fact, were already starting to see some. Lay offs from this. They would be you see it. Bakeries, restaurants, things of that nature of those are gonna, be the first to go and that something policymakers and economists has think need to think about to sort of smooth out this disruption. What do you do? Well, I think one of the answers- and it seems like this- is a bureau, I'm sure, there's some debate. My reading of the news has been that has been fairly by partisan, is longer paid leave from work that I think, has to help but that's again for full time employees. I don't know what we do about. I mean some sort of safety net for those people, I think, would be important. When there is such a high level of economic uncertainty, especially one
missed by. We know this massive disruption or shock. What does that do too? monetary or fiscal policy. Does it rob of some of its typical power? Yes, as we speak, a much trouble The S p five hundred fell almost ten percent, which is actually the second biggest drop since world war. Two and more surprising was half way through the day. The FED and the European Central Bank, both stepped in two tron, provide stimulus to the market, and you know like blowing against the wind. The market briefly went up and then just kept falling down so fortunately monetary policy and are broad and fiscal policy, the government of attacks and spending, I think, has pretty limited effect on slowing down in this case. Was it lay the uncertainty or is it just the magnitude of you know? The fear right now are the prime. Reason why the feds move wasn't consequential is the damage impact Covey nineteen is so large, there's not much that they can do. The other thing is worth bearing in mind, of course, before we went
So there's two weeks ago, interest rates ruddy very low. We just for a war against great recession in two thousand and two thousand. I'm, we really hadn't reloaded our arsenal and certainly know that it is mainly inside appears on the horizon, so economists and worried about this for a while one of the reasons people wanted actually the FED to put up into it's a bit of the last two or three years so that we had some ammunition. The present imprison trumpet very vocally said that he wanted to keep rates as low as possible. J Powell, the chair, FED reported Lee had had inclinations and going the opposite direction over the past several years, but instead either kept them or kept lowering them. I mean. Is this exactly the kind of instance, where you wanted to keep that powder dry with the benefit of hindsight, was a mistake in particular to have massive tax cuts over the last these three years, because rapidly growing very fast, would have been much better, is to push down the government debt so that right
Ah, when we really need it, we could spend money. Normally, you wanna have big blow out in recessions to support the economy. An annual savings back in the booms and instead we're in a hangover from spending in a boom and suddenly hit with a recession, is very little. Money left in the bank said the fiscal position. I think it is much more worrying because there we should have been generating a surplus, That was a big deficit. This past Sunday after we spoke the Federal Reserve the threats to nearly zero and also now. Goodbye at least seven hundred billion dollars in government bonds, move known as quantitative easing to try to keep market locking up the stock markets, not mollified. They fell another twelve percent on Monday. Let's face it. If we're not. Transacting with each other. For some long period of time that we'll take it all, I mean I think, about the airline, if the airlines aren't making any money for a while and can't run their roots, that's gonna fact lots of businesses and all of that
They go down for a while. Now the thought is, of course, that assumes everything speck up. The airlines can kick start start flying again. If that takes some time, it may take Little bit longer to recover, but I am hopeful that won't be the case. The last time we saw stockman it melt down like this, was after the financial crisis began to really gather steam and What we saw was a lot of investors, institutional, but a lot of individual investors really panicked when the markets ended up falling and many people sold low and then, as The recovery started? They ended up buying high. I think we all oh understand the emotional component of that specially for people who are a little bit old, they just want to preserve the capital as a finance purse whose seen a few of these rises and falls now over the past few decades. Do you have any,
advice for people. Yes, I very specific advice: don't touch it one of the basic findings from economic says: you can think them all any time. People try to time the market they end up doing far more damage than they help themselves is very difficult to do. One example. I had many colleagues. These are famous economists who said last week, I'm buying unbind like crazy. This will be a blip they're, all sorry, did. I hear, is working with the shocks because the other side of that trade is causing most. The eight for lunch retail investors like us. They don't really know what we're doing so at all. Is done, and I'm not the only financial economists, Tell you that many of us would is you have a long term strategy you stick to it and you can't be blindsided or emotional. About these short term blips cause. You can't really do much about them, so the best advice is actually not to look investing is of course a case. Specific pursuit you are an older investor poor. If you ve been putting money into
I've, twenty nine plan, your kids college tuition and their already deepened Highschool, then a third. Percent drop in the market has different implications and if you ve got a longer horizon in any case, We should probably expect stock market volatility to continue for the near term, especially because covered nineteen has created so much volatility in how the biggest companies in the world are doing. Business apple has closed its retail stores round the world, Microsoft, Google, an Amazon have enacted mandatory work from home policies for most employees. What will the effects of that be and will with nineteen, provide researchers and opportunity to measure all these effects. Yes Much as you know, a craft engineers investigate crash sites, economists investigate. You know what happened after covered nineteen Nick
whom probably knows more about working from home, then just about anyone you'll ever meet, not just because he's a professor and not because he's lazy, but because he has studied this very question. Somewhat coincidentally, six years ago, we ran a study out in Shanghai in China, where a large online travel agents could see trip really like China's version of expedient? They decided allow employees to work from home because they found office. Space in Shanghai was expensive. They asked a thousand employees who wanted to what, for I am an interest me only five hundred M volunteered, despite the fact that for employees on average were committing thirty minutes each one of those five hundred employees than randomized them. I birthday they randomize them so that the experiment would be truly an experiment and not an exercise. Self selection, and then we tracked them for nine months and what we found with three things: firstly, employees working from home, so these people that should say what booking telephone calls
making processing data on computers, so they were kind of individual working jobs. They were thirteen percent more productive. I mean but it is a huge increase. Reasons they told us was a quarter homes, they could conscience, ramble, but be actually they just tended to what their full shift rather than spending. Much time at lunch, arriving late arena taking long taller bricks. Secondly, that quit right hugged many that much referred war. It didn't wanna, leave their job and thirdly, one she controlled for performance, since there are performing better. That's they won't getting promoted any Asta. So there is some stinging. The tale that being at home seem to reduce your ability to get promoted. It sounds like good news that productivity, in happiness, and always things can increase. On the other hand, is how like that job, that you were yet lends itself, particularly well the working from home. Yes, yes, as you said, A couple of major caveats saves really not a team
So that's why you can be a home for a five day week. The second point was off the end of the study. They then ask. Pleased her. We decide what they want to work from home. I'll, come back in the office and half the employs said after spending moments at home. They didn't like it there isolated, lonely they volunteered to come back into the office so me. The warnings from you know the covetous permit is a the type of working from home. By talking about now, it's very extreme. It's full time. Five days a week, I should note that less than five percent of Americans currently do that lots of people work from home, day a week, but very few people work. My full time is kind of like comparing going to the gym, sporadically marathon training, so it's pretty extreme and be, as you say, we tested implies that don't need to spend time together and most people do. As I see it, a covert threat could well go on for months and months. I really worry about a big take up and people getting depressed mental health issues
This leads to health issues more generally, if the isolation it could lead. My prediction is we will find that people that do a routine, I was made perform. Ok at home, but for the majority of us I think he's going to be pretty painful. Past Neva, though the loneliness, I suspect, will be pretty damaging for productivity. Particular time goes on they give us one or two weeks. It wouldn't be so bad, but having but she's on two three to six months, I think he's gonna be hugely emerging economically, as you gather that data I suspect, companies are doing as you can get a sense of what is the productivity loss if any from having people work at home, Toby Moskowitz Again- and this might be useful for when you know your hiring employees, some of them want to that they come to the office three days a week and work at home two days a week sometimes is pushed back on that, but it's not really backed by data. This will give us a chance to to make that assessment, and this might be a nice way to force everybody to who actually run this experiment and see what
Hence I think another thing it's gonna be damaged in the lower and actually is, if everyone's working from home there's not gonna, be that kind of what place discussions com he discussions lunchtime talk, and most of it turns out, is important for long and innovation so day. Today we can get along with if you're dealing with the same current customers will same ideas, but when you examine businesses. Are scientists, regional, our? I research, a lotta that creativity comes from idle time and relax discussion? My colleagues and I gone. So I also worry that unites five. Ten years out from now we will see this is another luring in law on growth right because we ve taken a big hit to innovation. You know what about management and leadership and firms that are successful and unsuccessful? What you think might be learned along those lines from the covered nineteen situation. So we have a great
gee, that's very organised that can deal with change that inspires their employees. They can survive this by think chaotic disorganized bomb could literally fall apart and about already we start to see bankruptcies daughter had up. Is there anything you can point to that? Really good leaders you or don't do in a crisis. What one narrow piece of advice around working from home would be to try and regular check. In with your employer, So it's an unusual thing to do, but we're in unusual times you can easily set up every day. The beginning of that I end of the day. Ten fifty minutes face to face one on one Skype call and just you know chew the fact. It's gonna be really important.
Toys to feel like somebody's there. That cares about massages there that it may mean that manages gonna lose frankly dinner, three four hours a day on these one or more meetings, but I fear, without that they could alias contact and the employees could become caught, certainly depressed and lonely. Well, it's the same argument. The people had with the school closing sounds very costly to close a school people work. Now. What do you do with your kids? The kids aren't learn, I get all that those recourse. I think people are making the wrong comparison, though you can compare the cost of doing this verses. Doing it not doing it's not an option. The question is: you do now for a shorter period of time or you do later for a much longer period of time. All the your mentioning our definite costs. I just don't think we can avoid them at this point. Many people, including us on the show, have kind of complained about her agitated against the standard set up with meetings in corporate
America. We have a lot of meetings and many people feel that those meetings are beyond not productive but actually onerous and intrusive. Do you have any thoughts on whether this might change me? culture anyway. Nobody here It is more than professors, that's for sure, but everybody feels this way. I'll, give you an example. I had at the university today a couple of meeting scheduled that for wasn't coming into do this, I would have cancelled completely. Instead, I said: well, it's not all get together in a room that seems stupid. Time. Why don't we tried this on, which is just a euro telecoms? It works just fine. Initially, there was a little awkwardness where people introduced themselves and a few of the Euro. I would call them the schoolers said well. This is why we don't like these things: how awkward awkwardness, once we got into it, meeting was far more efficient and what was stated A half hour meeting took ten minutes and we resolved quickly. Many people hate commuting
and most people in the next you know period a time weeks months are going to be commuting a lot less one We return or if and when we returned to normalcy. Do you think it's gonna be hard to get people to get back on commuting wagon. Nobody likes commuting actually the number one thing on serve as a people say they hate the most and I think, the longer this Oh you'll have more requests for a look I could do. This could be three days weak, but not five you know, for the last twenty years, the prices of property in the centre of cities of such young people in particular one alive downtown areas, if suddenly we switch to working from home, you could easily see that reversing can easily see the Bing COM a satellite towns, but they would all be relative cheap and we could spread out more uniformly. So yeah, I think, for the housing market working from home is a big mass roll out to cut puppy price and central city's. I'm curious
you know once people are ordered to work from home and then they all of a sudden there not having to come. You they're not having to tuck in turn it cetera. Maybe they don't even change your underwear, I don't know, do you think getting some of those people back to work, especially back to the community every day will be difficult of total out of comes in the: U S, an international about working from home, that kind of reluctant to do it then nervous they let the genie at the bottom Ninos hard to reverse it actually think this experience is going force, a lot more serious thinking about working from home and see a big spike up? Some of it? will definitely be beneficial in the long run. These are just a few, and perhaps the most predictable of the countless economic and social side effects will be seen from the cuban nineteen response. What do you see with snow and radio? FR economics, dot com coming up after the break, how
education, work with schools and universities suddenly shifting to our mind teaching- and if you are desperate need of a silver lining. Well, there is one clearly the epidemic was causing an immense amount of harm on the ground, but it was also reducing air pollution. That's coming up after this. Everybody I'm ticket Sumter, and I'm an actress and most recently you can see me on ABC Mixed. I this is tie Randolph and I'm Mombasa Kevin hearts laugh out loud network and we the host of the sugar a sweet space where we She to indulge on topics we sometimes get left out of its face by four. FAO Brown man. This is a place of community where we want you to feel lots of love, peace and laughed aloud
I was pregnant someone, those I oh when our hair, when I was in labour, I was like I was having a orgasm grow airs go now, some of you now somewhere baling. Maybe You ve not actually had a night. This exists. We space I would like us to see ourselves and be ourselves: get ready to open up top, laugh even cry with our sweet should a the ship is out now listen on stitches, apple, podcast or wherever you get your pat gas social distancing to diminish the spread of covert nineteen means that were This was the limit, our interact with other people as much as possible. Some of us may be. Most of us we'll find this incredibly hard. The late economists Gary Becker,
a career of studying, behaviors, the most economists than think much about including addiction, and what did Becker Argue is the most addictive thing in the world. Other people we are, for the most part, social, What kind of animals will we be without the socializing we're about to find out one of the biggest changes right now, one of the biggest unplanned experiments of the nineteen Europe has to do with both teaching and learning schools and diversities across the? U S and elsewhere have been shut down. Yes, Stamford closed yeah. That's what they done here at Yale to those again. The economists Nicholas Bloom and Toby Moskowitz we're talking about covered nineteen as a natural experiment.
Will allow people like you to measure the efficacy of remote teaching. So can you envision actually doing that study or someone doing that study? What kind of data would be needed? What kind of time frame would be useful cetera you may come, courses to savour courses taught in person last year? She may sailor got ten years are basically the same course than suddenly they see. We teach your online. What do the grazed like? What the lonely outcomes look like and Stamford freaks? what ye come. One, which is one of our key courses, was taught in full spring and winter quarters say look at Eco munchkins. They took it face to face lost court of us as the ones next school today. They take it entirely online and see how they do in years, two three and four and you, your suspected conclusion, do think that there are some kind of antiquated inefficiencies in the system that could be. You know been aided, and even though it would be a shame that it took something they covered. Nineteen to produce. This can change that there might be a lot of benefits to some form
remote learning here, I'm not the optimistic that remote funding is gonna. Be that successful. The reason is, from personal experience, Not my value added is what I call the personal trainer effect. You know giving students motivate your forcing people to focus for an hour and a half, for example. Probably the biggest single and movement in my teaching was the year that I band laptops and cell phones from being used in the class Anna Maria kill us? Suddenly, everyone pays attention, whereas when tough line is so easy to get distracted by, and I watching the football or seeing the news or watching the stock market. So let me put to be cynical for a moment and say well, the kind of person who would measure this effect long term, towards remote teaching actually brings gains and that my eliminate a lot of live professorial activity. The kind of people would come up with that are professors, so is there
in the best interest or in the interested all of anyone to actually study and come to that kind of conclusion. Yes, absolutely, I think your eyes, economists, yours one progress, so imagine- professes- can suddenly teach much more efficiently by recording a class once than have played on video. Then, of course, we can spend our time more one on one Miss Stevens, Myspace, the highest value added is sitting down with it. Did your students in going through their research papers and if we could spend hours every day that I think would be much more valuable for students such be then just reciting matter. But they could learn out of a textbook. So many universities have already spent a lot of time and a fair amount of money putting their courses online and then there are for profit firms. Course, era and others who you know have pretty robust platform and I see that the take up numbers are not insubstantial, but considering how difficult and expense
of and timely, it is to attend. College should go to four years worth of college. I've been shocked at how low the take up rate. Our for online learning and I'm curious whether you think that this might adjust. That is my view on this injustice, Twenty five years of teaching myself, I find, if you're, just teaching, facts and methods that be done almost as well on line as it can live. You could even our maybe them better online cause. You can supplement it with video materials and you can record it right and get it perfect if you're trying to teach someone had to think and you're trying to teach them. Let's how to do. Research, try ask an interesting question and get a scientific answer. That's much more hands on, so you don't I'm teaching basic investments what's a stock? What's a bomb I think I can do that just as well on line as I possibly can in the classroom, but if you're talkin about training students, how to think ripe and how to read
you know whether its writing, an English, I say or writing a poem or Yeddo, coming up with a computer program that the Euro does acts or yellow thinking about how to price some obscure private equity firm that I think requires a lot more back and forth a lot more interaction, and I suspect that the reason still have the university model is that's what they're trying to do? What I tell my students is I'm trying to teach you how to think? Because what I teach you today may not be ready. Five, ten twenty years from now, but if you know how to think about it, you'll be able to figure it out. You know when the broad Jim is very terrible analogy, but you know there's a reason that basketball players want to play: for an offence. I have to say whenever an economist compares himself to the Brown James, I'm all ears. Ok, I wasn't go in there, I swear, but making making a very poor analogy. Analogies, ok, but it's not a very, very different scale, which is it? Oh, I think, when you're teaching your reacting to your students, you see their faces
see their questions you see, confusion, sometimes use like go on this very difficult to do, even though you see their faces on the flat screen, it's not quite the same and for an athlete it must be a hundred times like that right and I sort of get with essence comes from. So now it's in my interest to say that that's the guy If it turns out, we could teach just as effectively remotely well that's a whole different pair of time. For a guy. Like me, yeah for academics, it's been in some sense a real opportunity to explore other ways of doing things that's Marshall, Burke, the environmental economist at Stanford, so all the conferences I was gonna go to this ring have been cancelled. I've sent my lab group home. So I hope my lad meetings online. We fed speaker candidates online, and I sceptical that it would work well initially, and actually, I think, it's working quite nicely- and I really hope that we learn that lesson and then we do some of these substitution
there's no reason I need to fly to the east coast. You know many times a year to give talks. Why can't we just do remotely? I think this will give us the opportunity to Laura the benefits of these other modes of economic production. Sir. I think this gonna generate huge amounts of experimentation and teaching and in the long run some of it we go, but is very painful right now. You know what you think, schooling, especially in their early ages, socialization seems to be a big benefit, or at least that's what people say so right now, or seeing all levels of schools being closed around the? U S and in other places, from Pre K up through graduate school. So I'm curious if yemeni thoughts about what kind of unintended or knock on effects that may have enough, I think so position is actually really important is also. Trusting that the american system has been criticized heavily for doing not that well, an international comparable maths test and Sciences and reading, The Americans are very good at socializing and I don't think it's a common sense. Has lots of american style tops
saucy eyes and entrepreneurs. If part of this socialization process, you know from an early age marking, kids had taught to argue to speak up, and I think that will be lost we are moving tawny to online home based teaching. Marshall Burke has already moved his own young children to home base teaching we polar school this morning, in already two hours into our homes day, they were punching each other in the face So I am not optimistic livelihood improvements from these stay at home weeks. We should say they are twins right. They are twenty, so they like punching each other and effects. Are they both boys by any chance to girls? Actually, it cuts across all genders. Apparently, here's how Burke dust have the work he does as an environmental economists. So I said
be how changes in the environment shape, arrange a few Malcolm's health outcomes, economic outcomes, livelihoods. More broadly, can you talk for second met your research on the association between climate change and violence. So One thing we have done is a symbol, historical data from around the world on violent outcomes, and what we find is a very strong linkage between changes in I prefer in and increases in various types of violence. So tinctures go up. You actually see more homicides in the. U S, you see more civil wars in Sub Saharan Africa. So this is not a new finding. It comes through very clearly in many different data sets an can. You explain just on a kind of If you're a level the mechanism by which that happens. So there mom we'll mechanisms that are consistent with this effect? I think we're still trying to understand exactly which water, which combination of them as most important, there's official, logical mechanism, so psychologists have shown for a long time that, if you just
put people in a room and turn up the temperature. You can pick them off, even if there's no one else in the room, but patterns of social engagement, the chain so warm evening. Many more people are out on the street and maybe there enough different social interactions that lead to an increase in crimes and these large, scale changes declines in economic productivity or other outcomes. Is the standard explanation for why you would see things like civil war, civil conflict increase when temperatures go up so, given all that, I am curious if you have any proof and about a similar association between violence in Coventry. Team, because again you ve got the regular living patterns of many many many people mean it's gonna, be billions of people around the world being disrupted. Everything from going to workforce is not going to work, for us is how they eat versus how they interact, etc, and I am curious whether that potential makes you anxious interested to measure etc.
Absolutely interesting to measure, I would think most of the measures being put in place to reduce them right of covered. Nineteen are reducing social interaction, that's explicitly their ball, and so you know my knife prediction would be that that would reduce at least many types of individual crime. If things got bad enough, where resources were constraints, could things get a lot worse? I think so and a lot of people are by weapons here in the: U S so to me that suggests that some people think that broader scale violence could break out. I very strongly hope that's not the case, but that's clear. A concern of some people. Okay, so the big reason we want to speak with. You today was about this recent work. You ve done specifically related to cope. Nineteen and an unintended consequence of the lock down in China should so a few months into the covered nineteen epidemic in China, where it started,
Nasa published some really startling photos of changes in air quality over China. Chinese add, you know, taken very aggressive action to limit the spread of the virus in that had economic consequences, and you can actually see. From space to many factories have been shuddered. People are not going to works What NASA showed was a dramatic reduction in air pollution across a lot of China and, as an environmental economists were very interested in air pollution, why it changes what effect it has on economic things we care about in the world, so I and many other environmental economist immediately thought you know this could be. Some sense a silver lining in the epidemic. Clearly, the epoch, it was causing an immense. Amount of harm on the ground, but it was also reducing air pollution and we have decades of research suggesting that air pollution is
really bad for health outcomes, and so any reductions in air pollution are gonna, be good on average for health outcomes. There were another reason, example of a sudden drop in air pollution, also in China in two thousand, eight Chinese, a fish, wanted the air around Beijing cleaned up ahead of the two thousand eight olympics. At that point, Beijing hopes the dirtiest air in the world, and so what we see in late, two thousand seven in Berlin, two thousand eight was one of the most dramatic effort to rapidly clean up air quality that we press. Seen anywhere throughout human history. They raise the price of gasoline to encourage people to not drive they Prohibited certain polluting vehicles from being on the roads at all they shut down A range of manufacturing plants submit manufacture, concrete manufacture, for some of the large steel plants to either turn off or to actually relocate and
all of this had a really dramatic effect on air quality are clearly improved by about a third and the span of just a couple months, and this was all temporary suspension and correct. This was temporary suspension banks were done in all these constraints were lifted and once the constraints we're lifted. Where did the air pollution quality go back to so I went back to its previous, very high levels of fortunately, and was that relatively short, amount of time with less air pollution enough to substantially improve people's long term health outcomes. So it turns out it was so you can come air how mortality change in Beijing relative to other cities. That did not see this dramatic change in air pollution, so the researchers found very large or die in child and infant mortality and very large reductions in old age mortality. What can you tell us about the in utero effects of air pollution? This has been studied a lot in the context of the Clean AIR Act in the: U S, which led to pretty substantial
prudence in air quality across the U S and people yeah, fine, really large effects of exposure to air pollution. In utero leads to later life outcomes, reductions in earnings, poor health overall, so air pollution does not have to kill you to make it worse off so Marshall Burke saw those NASA maps showing a decrease in air pollution across Anna due to covered nineteen, he went to the data and what kind of drop did he find? So the percentage shop was actually quite as to what we saw in the Beijing Olympics. Abc ITALY smaller, I would say a twenty percent improvement in air quality and with the Olympic You mentioned that the drop was very variable. The concentrated on Beijing. If you were to look at all of China, a couple more Syndic over nineteen verses. Before do you see a drop
did much everywhere, or is it mostly in the places where covert nineteen was particularly concentrated. So the data are still rolling in on this, but the reductions do seem to be the largest in places where covered nineteen was most serious. The satellite data indicate that a war on you know saw media and very large decline in economic activity and not lead to a decline in air pollution Cities in southern China have seen the largest overall decreases, in air pollution and that's because in the north places like Beijing actually home heating is an impasse source of energy use and also a source of pollution, and that hasn't changed. That much are actually in Beijing. You seen next to no decrease in airports. Can do to cover nineteen, that's both because the air pollution and because cement factories actually don't like to turn off their blast furnaces. It's really expensive. Stop them in and start them against today, like to just leave alone. If they can insert a try to wait it out and that's what they ve done, and so you see.
Serve no decline in air pollution. Around Beijing sort of ironically, are so tell us what you believe we'll be the relationship between this reduction in pollution and mortality in China. So I calculated This reduction in pollution will likely save two thousand lives across China. I want to emphasise that this is it's a pair action in a sense: it's not a measurement its using these estimates of the relationship between air pollution, immortality that we had no from other studies. So what those estimates tell us is that the gains are concentrated again among the very young and among the very old, so those fifty thousand Let's call them saved lives kind of saved in quotes because it somewhat speculative or predictive that, in your estimate, as we speak with a moving target granted, would compare to how many lives lost due to covet nineteen directly direct
So far there have been around three thousand lives lost to cover nineteen in China that never continues to grow up at go up much more slowly. China seems to have really turned the corner on this, so it's about you know twenty times, fifteen to twenty times higher the debts, from air pollution? I want to emphasise that the three thousand deaths are just a direct attributed desk to cover nineteen. That does not count all the in of the immense disruption. That's happened that could have two additional des other people not being able to get treated for non covered, related diseases, those we have yet to really observe in the mortality statistics, and so a full accounting will needed. You not take those into account and we don't have the data to do that. Yet if we were to focus Virgin
another minute on the silver lining? I'm curious about other behavioral responses to covet nineteen in China, so air pollution fell enough to have a big positive effect. Transportation is a substantial contributor to air pollution. So did transportation fall enough to lead to maybe a big drop in traffic? nowadays as well. I think that's an interesting question and again one that would have to be studied once we have more mortality data in, in settings in which car accidents are alarmed Their mortality Orford certain demographics, like young, otherwise healthy demographic through which car accidents are the leading cause of death in many parts of the world. I think you would expect a reduction in if it, I can imagine people listening to this and say this, Professor Burke, That's a good nice person and thoughtful person and a bright person, but
he's such an economist there's a global pandemic going on, and he is finding this silver lining in this gigantic black cloud that your identifying, what might be let's say, forty five thousand fewer deaths in China because of less air pollution versus that's from carbon eighteen. So I'm just curious. Does it feel and I don't mean to ask you to you, know hosting self on your own petard, but does it feel somewhat awkward? You feel good, You're conflicted in any way in kind of examining these the of that silver lining. While the world is in such shock and uproar, it feels terribly awkward and it was a calculation I could do because I had the data, but I would hesitate. Even cod, a silver lining to turn their back. I did this capital I tweeted out and allow the response was like? Well, you know this is terrible lake and you're, not accounting for
all the other negative consequences that a large pandemic like this would have on health system, and I think that's right in those have been the stories come. Out of ITALY in coming out of China right, if you have any other health complication unrelated, Nineteen is going to be very hard to get to the silver lining is irrelevant right now, let's focus on the dark cloud and getting the dark cloud under control. Epidemics are terrible. They result in an immense amount of human suffering. That is going to contain to happen in our country, and that is where our focus needs to be, and none of my silly calculation should take away from that to me what this calculation does highlight, though, and unfortunately things like covered nineteen or other dramatic events. Bring into focus is what's going on when we don't have pandemics and if anything the pandemic can help highlight the negative effects.
Large everyday actions, so I guess ideally what you'd want to think is, after the recovery from this pandemic, what you'd have as policymakers look at you Dayton, your conclusions and say: well: let's not wait for the next pandemic to curtail pollution. Look how many lives it saves right. That's right! I think the chinese government, you have actually seen pollution levels, come down pretty dramatically in the last few years. China is already making progress on this problem and I think, should be commended for that. The autonomous really like to think in cost benefit terms. So let's wait positives and let's, where the negatives, unless compare them to me, that's not obviously right way to go in an epidemic. Less just think of this less focus on the negatives less not do a cost benefit calculation of epidemic I think that's just the wrong framing overall, despite that being what we I want to do, but let's use the epidemic to learn about things. We could do better when we don't have epidemics. I think that's the way to think about it. Lets pretend for a minute
that you know, God willing. The pandemic turns out to be less fatal list imaging than it certainly could be, and that in a couple months time things seem to be getting back to what would seem to be pre covert, nineteen normal. Do you really think that people will, for instance, decide not to congregate Much do you think that online learning or remote working or any of these other substitutes will actually stick around? That's a great question and the answer I have no idea. I mean I'm old enough now to remember when computing started, to become pre widely available and allowed smart people said. Will that is the end of cities? It's the end of in person, work period everybody's gonna live in. You know Fiji wherever they want, and it just didn't happen. In fact, the opposite happened. This propinquity turned out to be increased We valuable and urbanization has risen in risen, the reason so
I'm curious about what curiosities you may have to what kind of lasting effect you may want to look or as an economist. Yes, oh economic historians. Certain economic historians point to these critical junctures in history, where it wasn't slow change, but something specific happens that set entire countries or entire economy. On a different course. So obviously remains to be seen whether this specific epidemic, and hopefully it subsides and we get an under control, went to goes away. What happens, but one idea is that these bits of large scale. Events could be critical juncture that cause us to change our hey Viewer in ways that just sort of slow moving changes in technology or slow moving changes and preferences never do coming up. Next time on for economics, radio were not really sure what's coming up next time, as with you and everyone else, our lives been scrambled bit here
hoping you and your loved ones. Even your enemies stay healthy, and if not that they can get the care they need, that's all keep an eye on what another shall we, We will be back next week with a new show, thanks for listening, We can almost radio is produced by stature and w productions. This episode was produced by Daphne Chen. Our staff also includes Alison Craig Low Gregg Ribbon cyclopean scheme at Harry Huggins and Korean Wallace in turn is Isabel, o Brien. We had help this week from James Foster, theme song is MR fortune by the hitchhiker's. All the other music was composed by Luis Guerra. You can get economics, radio and any podcast app. We can also be found on twitter. Facebook is linked in or the email radio for economics
Transcript generated on 2020-04-03.