Transport policy
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This paper examines the socially optimal lockdown and travel (social activity) restriction policies for communicable virus including COVID-19. In our simple model, we exploit the remarkable similarity in the structure of external costs causing market failure between the socially optimal choices of the COVID-19 pandemic case and the socially optimal urban traffic congestion level. ⋯ The monetary penalty in this model resembles the classical Pigouvian tax, which should increase with the city's population, people density, and economic prosperity; (4) when a government subsidizes or fully covers medical expenses of COVID-19 patients, stricter travel restrictions with heavier penalties are required. This is to avoid crowding out of the health care system.
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When 2020 began, we had no idea what was to unfold globally as we learnt about the Novel-Coronavirus in Wuhan, in the Hubei province of China. As this virus spread rapidly, it became a matter of time before many countries began to implement measures to try and contain the spread of the disease. COVID-19 as it is referred to, resulted in two main approaches to fighting the viral pandemic, either through a progressive set of measures to slow down the number of identified cases designed to 'flatten the curve' over time (anticipated to be at least six months), or to attack it by the severest of measures including a total lock-down and/or herding exposure to fast track 'immunisation' while we await a vaccine. ⋯ The main restrictions, in addition to social distancing of at least 1.5 m, are closure of entry to Australia (except residents returning), and closure of non-essential venues such as night clubs, restaurants, mass attendee sporting events, churches, weddings, and all social gatherings in any circumstance. With some employers encouraging working from home and others requiring it, in addition to job losses, and many children attending school online from home, the implications on travel activity is extreme. We identify the initial impacts associated with the first month of stricter social distancing measures introduced in Australia.