I live in NSW, where, at the moment, the Delta Variant is threatening to break out in a population that hitherto has been largely spared the virus. At the moment, we are under a lock-down to prevent that, which I strongly support. The lockdown, tragically, does not seem to be working, and the government is moving to toughen it up. As one of the measures to do this, and despite there being 0 confirmed instances of the virus being transmitted outdoors in NSW and numerous cases of it being transmitted indoors, the government is moving to limit outdoors gatherings to 2 people. I want to explain why that’s bad using a very simple economic model.
Let’s suppose that there are two types of food, potato and lettuce. Suppose the cost of potato increases- what will most likely happen to the level of demand for lettuce? People will buy more lettuce, because its price, relative to potatoes, has gone down(*). The lesson is, when you make something pricier, you make its substitutes more attractive.
Now, let’s say I’m a person who isn’t very civically minded, or maybe I’m just desperately lonely. As a result, I intend to meet with my friends regardless of the public health orders. Consider two different scenarios:
On the first scenario, meeting with a group of friends inside is prohibited, while meeting with groups of friends outside is permitted. I consider the risk of a fine and decide I’d better meet them outside.
On the second scenario, meeting with groups of friends whether inside our outside is prohibited. I consider the risk of a fine- it’s actually greater if we meet outside, because the cops are more likely to catch us outside than inside. I therefore decide the risks and costs involved are greater meeting outside than inside. So I meet up with my friends inside. The risk that I pass on the coronavirus becomes hundreds of times larger.
By raising the costs associated with meeting outside, NSW risks increasing the likelihood of people saying “screw it, I’ll just meet them inside then”. That means a higher risk of Coronavirus transmission.
The larger message here is that, when considering making something illegal, you have to consider, among other things, what that good or activity is a substitute for. If a good or activity is a substitute for something more dangerous and destructive than itself, that is a strong argument against banning it. It’s not always a decisive argument against banning it- but you have to consider it. Given that there are zero documented cases of transmission in NSW outdoors, and given that meeting outdoors is a substitute for meeting indoors, the dangers of banning outdoor recreation in groups larger than two very likely outweigh the benefits.
I’m not against banning things. I’m far, far, from one of those people who whines about the nanny state at every turn, I like public health researchers, but this is something they consistently seem to get wrong.
Footnote
*- Economists will note I’m assuming here the substitution effect outweighs the income effect. This is true but A) It usually does and B) It won’t matter to our model here.
In the sentence “On the first scenario, meeting with a group of friends outside is prohibited, while meeting with groups of friends inside is permitted.” outdoor and indoor appear to be swapped.
Yeah the no meeting outdoors rule is a bit iffy. Not exercising in groups kinda makes sense cause you are puffing all over the place but hanging out in a socially distanced group to maintain connection is victimless.
Sadly, people are idiots and policing rules is harder than writing them. If you allow people to congregate outdoors they will flaunt and push the rule and eventually you will see groups of people giving each other the plague. BUT that is only in a heightened state of transmission.
Should be one of the last measures implemented and one of the first removed. I believe it's only on the table because people are idiots and cops need to be able to simply tell people to move on.
Whether people do actually break the rules and visit people indoors is a whole other story. I don't hear of it - but that doesn't mean it's not happening.