Economics in a picture
Older individuals change their behavior more than youngsters in response to the Covid-19 pandemic
The Covid-19 pandemic is changing the lives of virtually everyone in the world. There are, however, some groups that are more affected by this disease than others. Older individuals, for instance, are more likely to develop severe symptoms caused by the SARS-CoV-2 virus and die from its complications. Economics aims to study the effects of pandemics by taking into account individuals’ behavioral changes through the use of simulated mathematical models.
Using an economic model of the Covid-19 pandemic featuring rational agents and young and old individuals, it is found that older people change their behavior more than youngsters. To protect themselves from infection, older individuals choose to stay longer at home and away from activities that are riskier in terms of infections. This added protection leads to a flattening of the infection curve for older people. Therefore, even though Covid-19 is more fatal to older individuals, the generational gap in fatality rates would be even higher if this behavioral change had not been considered.
For more details see Brotherhood, Kircher, Santos and Tertilt (2020), “An economic model of the Covid-19 pandemic with young and old agents: Behavior, testing and policies”, Banco de Portugal Working Paper 14.
Prepared by Cezar Santos. The analyses, opinions and findings expressed above represent the views of the authors and not necessarily those of Banco de Portugal or the Eurosystem.
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