Abstract
This paper points out the importance of two perspectives on preventive measures against COVID-19 as contributions of economics: (1) clarifying the trade-off between health and economy and implementing cost effective measures, and (2) understanding people's behavior.
Policy makers will choose among the trade-offs, which are drawn by economists. If a measure is not on the efficiency frontier, economics can suggest an improvement.
Restraints on individual behavior and on business operations led to the trade-off between health and freedom. In order to succeed in restricting activities based on requests without legal enforcement, we need to consider two questions: why do people comply with requests for restraints (it is not selfish behavior), and why did people no longer comply with the requests (why was the effect of emergency declarations weakened)? Then, the economic perspective that “if the altruistic behavior becomes expensive, altruistic behavior will not be taken” becomes important.
Actual countermeasures against COVID-19 may create problems because of the lack of understanding of people's behavior behind these two questions. They raised the cost of cooperating with the countermeasures, and some people became reluctant to do so. By introducing penalties in the amendment of the law, the government gave the selfish incentive and tried to secure the cooperation that was once lost, but this may crowd out people's altruistic behavior and undermine the social order.
