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Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jes´ us Fern´ andez-Villaverde 1 Chad Jones 2 May 27, 2020 1 University of Pennsylvania 2 Stanford GSB

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Page 1: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

Estimating and Simulating a SIRD Model of COVID-19

for Many Countries, States, and Cities

Jesus Fernandez-Villaverde1 Chad Jones2

May 27, 2020

1University of Pennsylvania

2Stanford GSB

Page 2: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

1

Page 3: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

Outline

• We want to take a basic SIRD model to the data for many countries, states, and cities:

• Exploit variation across time and space.

• Measure effects of social distancing via a time-varying β.

• Make a more general point about structural vs. reduced-form parameters in SIRD models.

• Estimation and simulation:

• Different countries, U.S. states, and cities.

• Robustness to parameters and problem of underidentification.

• “Forecasts” from each of the last 7 days.

• Extended results available at: https://web.stanford.edu/~chadj/Covid/Dashboard.html.

2

Page 4: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

Outline (continued)

• Re-opening and herd immunity: How much can we relax social distancing?

• How do we make more progress in understanding time-varying parameters and their relation to

observed policies?

• Heterogeneous agents SIRD models.

• Example of policy counterfactuals with heterogeneous agents SIRD models: introducing a vaccine.

3

Page 5: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

Basic model

Page 6: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

Notation

• Stocks of people who are:

St = Susceptible

It = Infectious

Rt = Resolving

Dt = Dead

Ct = ReCovered

• Constant population size is N:

St + It + Rt + Dt + Ct = N

• Only one group. Why? I will return to this point repeatedly.

4

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SIRD model: Overview

• Susceptible get infected at rate βt It/N.

• New infections = βt It/N · St .

• Infectiousness resolve at Poisson rate γ, so the average number of days that a person is infectious is

1/γ. E.g., γ = .2⇒ 5 days.

• Post-infectious cases then resolve at Poisson rate θ. E.g., θ = .1 ⇒ 10 days.

• Resolution happens in one of two ways:

• Death: fraction δ.

• Recovery: fraction 1− δ.

5

Page 8: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

SIRD model: Laws of motion

∆St+1 = −βtSt It/N︸ ︷︷ ︸new infections

∆It+1 = βtSt It/N︸ ︷︷ ︸new infections

− γIt︸︷︷︸resolving infectious

∆Rt+1 = γIt︸︷︷︸resolving infectious

− θRt︸︷︷︸cases that resolve

∆Dt+1 = δθRt︸ ︷︷ ︸die

∆Ct+1 = (1− δ)θRt︸ ︷︷ ︸reCovered

with D0 = 0 and I0. 6

Page 9: Estimating and Simulating a SIRD Model of COVID-19 for ...jesusfv/slides-sird.pdf · Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities Jesus

Social distancing

• What about the time-varying infection rate βt?

• Disease characteristics – fixed, homogeneous (exceptions?).

• Regional factors (NYC vs. Montana) – fixed, heterogeneous.

• Social distancing – varies over time and space.

• Reasons why βt may change over time:

• Policy changes on social distancing.

• Individuals voluntarily change behavior to protect themselves and others.

• Superspreaders get infected quickly, but then recover and “burn out” early.

• Spatial aggregation: SIRD model is highly non-linear.

7

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Recovering βt and R0t, I

• Recovering βt , a latent variable, from the data is straightforward.

• Dt+1: stock of people who have died as of the end of date t + 1.

• ∆Dt+1 ≡ dt+1: number of people who died on date t + 1.

• After some manipulations, we can “invert” the model and get:

βt =N

St

(γ +

1θ∆∆dt+3 + ∆dt+2

1θ∆dt+2 + dt+1

)

and:

St+1 = St

(1− βt

1

δγN

(1

θ∆dt+2 + dt+1

))

8

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Recovering βt and R0t, II

• With these two equations, a time series for dt , and an initial condition S0/N ≈ 1, we iterate forward

in time and recover βt and St+1.

• We are using future deaths over the subsequent 3 days to tell us about βt today.

• While this means our estimates will be three days late (if we have death data for 30 days, we can

only solve for β for the first 27 days), we can still generate an informative estimate of βt .

• More general point about SIRD models: state-space representation that we can exploit.

9

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Recovering βt and R0t, III

• We can also recover the basic reproduction number:

R0t = βt × 1/γ

and the effective reproduction number:

Ret = R0t · St/N

• Now we can simulate the model forward using the most recent value of βT and gauge where a region

is headed in terms of the infection and current behavior.

• And we can correlate the βt with other observables to evaluate the effectiveness of certain

government policies such as mandated lock downs.

10

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An endogenous R0t

• Individuals react endogenously to risk.

• Indeed, much of the reaction is not even government-mandated.

• We could solve a complex dynamic programming problem.

• Instead, Cochrane (2020) has suggested:

R0t = Constant · d−αt

where dt is daily deaths per million people.

11

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Estimates and simulations

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Parameters assumed fixed and homogeneous, I

• γ = 0.2: the average length of time a person is infectious is 1/γ, so 5 days in our baseline. We also

consider γ = 0.15 (7 day duration).

• θ = 0.1: the average length of time it takes for a case to resolve, after the infectious period ends, is

1/θ. With θ = .1, this period averages 10 days.

Combined with the 5-day infectious period, this implies that the average case takes a total of 15 days

to resolve. The implied exponential distribution includes a long tail capturing that some cases take

longer to resolve.

• α = 0.05. We estimate αi from data for each location i . Tremendous heterogeneity across locations

in these estimates, so a common value is not well-identified in our data.

We report results with α = 0 and α = .05.

12

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Parameters assumed fixed and homogeneous, II

• δ = 1.0%.

• Case fatality rates not helpful: no good measure of how many people are infected.

• Evidence from a large seroepidemiological national survey in Spain: δ = 1.0% in Spain is between 1%

and 1.1%. Because many of the early deaths in the epidemic were linked with mismanagement of care at

nursing homes in Madrid and Barcelona, we pick 1% as our benchmark value.

• Correction by demographics to other countries. For most of the countries, mortality rate clusters around

1%. For the U.S.: 0.76% without correcting for life expectancy and 1.05% correcting by it.

• Other studies suggest similar values of δ. New York City data suggests death rates of around 0.8%-1%.

• CDC has release a lower estimate (0.26%). I just do not see it.

13

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Estimation based entirely on death data

• Johns Hopkins University CSSE data plus a few extra sources for regions/cities.

• Excess death issue:

• New York City added 3,000+ deaths on April 15 ≈ 45% more.

• The Economist and NYT increases based on vital records.

• Example: Spain, where we have a national civil registry: 43,034 excess deaths vs. 27,117 at CSSE

(18%).

• We adjust all NYC deaths before April 15 by this 45% and non-NYC deaths upwards by 33%.

• We use an HP filter to death data.

• Otherwise, very serious “weekend effects” in which deaths are underreported.

• Even zero sometimes, followed by a large spike.

14

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Spain

15

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ESTIMATING AND SIMULATING A SIRD MODEL 15

Figure 2: New York City: Daily Deaths and HP Filter

Feb Mar Apr May

2020

0

10

20

30

40

50

60

70

80

90

New York City (only): Daily deaths, d

= 0.010 =0.10 =0.20

Figure 2 shows the data (blue bars) for daily deaths together with an HP filter

of that data (with smoothing parameter 200) in green. Figure 3 then shows the

change in the HP-smoothed daily deaths, while Figure 4 shows the double dif-

ference. It is these HP-filtered data that are used in the construction of R0t in

Figure 1. Because the HP-filter has problems at the end of the sample (e.g. there

are fewer observations so noise becomes more important, and double differenc-

ing noise reduces precision), the latest estimate of R0t we have for each location

corresponds to May 9, even though our death data runs through May 19: we lose

2 observations for the moving average, 3 observations for the double differencing,

and then truncate by an additional 5 days to improve precision.9

Our estimation also allows us to recover the fraction of the population that is

estimated to be currently infectious at each date. These results are shown for

New York City in Figure 5. For our baseline parameter values, this fraction peaks

around April 1 at 5.7% of the population. By May 9, it is estimated to have declined

9These graph of the underlying data are available for every location in our dataset in the extendedresults on our dashboard.

16

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Guide to graphs

• 7 days of forecasts: Rainbow color order!

ROY-G-BIV (old to new, low to high)

• Black = current.

• Red = oldest, Orange = second oldest, Yellow =third oldest....

• Violet (purple) = one day earlier.

• For robustness graphs, same idea:

• Black = baseline (e.g. δ = 0.8%).

• Red = lowest parameter value (e.g. δ = 0.8%).

• Green = highest parameter value (e.g. δ = 1.2%).

17

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14 FERNANDEZ-VILLAVERDE AND JONES

Figure 1: New York City: Estimates of R0t = βt/γ

Mar 14 Mar 21 Mar 28 Apr 04 Apr 11 Apr 18 Apr 25 May 02 May 09

2020

0

0.5

1

1.5

2

2.5

3

3.5

R0(t

)

New York City (only)

= 0.010 =0.10 =0.20

5.1 Baseline Estimation Results

Figure 1 shows the estimates of R0t = βt/γ for New York City. For the baseline

parameter values, the estimates suggest that New York City began with R0 = 2.7,

so that each infected person passed the disease to nearly three others at the start.

This estimate agrees with other recent findings and its particularly plausible for

such a high-density metropolitan area as New York City.8 Social distancing is

estimated to have reduced this value to below 0.5 by mid-April. After that, R0t

seems to fluctuate around 1.0.

It is worth briefly reviewing the data that allows us to recover R0t. As discussed in

Section 4, we invert the SIRD model and use the death data to recover a time series

for R0t such that the model fits the death data exactly. In particular, this inversion

reveals that R0t can be recovered from the daily number of deaths (dt+1), the

change in daily deaths (∆dt+2), and the change in the change in daily deaths

(∆∆dt+3).

8For instance, Sanche, Lin, Xu, Romero-Severson, Hengartner and Ke (2020) estimate an even highermedian R0 value of 5.7 during the start of the epidemic in Wuhan.

18

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ESTIMATING AND SIMULATING A SIRD MODEL 17

Figure 5: New York City: Percent of the Population Currently Infectious

Mar 14 Mar 21 Mar 28 Apr 04 Apr 11 Apr 18 Apr 25 May 02 May 09

2020

0

1

2

3

4

5

6

Per

cent

curr

entl

y i

nfe

ctio

us,

I/N

(per

cent)

New York City (only)

Peak I/N = 5.67% Final I/N = 0.43% = 0.010 =0.10 =0.20

to only 0.43% of the population.

Figure 6 shows the time path of R0t for several locations. There is substantial

heterogeneity in the starting values, but they all fall and cluster around 1.0 once

the pandemic is underway. By the end of the time period, the values of R0 for

Atlanta and Stockholm are noticeably greater than 1.0.

Figure 7 shows the time path of the percent of the population that is currently in-

fectious, It/N , for several locations. The waves crest at different times for different

locations, and the peak of infectiousness varies as well.

Table 1 summarizes these and other results for a broader set of our locations. The

full table, together with∼25 pages of graphs for each location, are reported on our

dashboard. Now is a good time to make a couple of general remarks about our

estimation. First, as the number of daily deaths declines at the end of a wave —

say for Paris, Madrid, and Hubei in the table — the estimation of R0t can become

difficult and dominated by noise. In the extreme, for example, once total deaths

are constant, our procedure gives βt = 0/0. One sign of such problems is that

“today’s” value of R0 can fall to equal 0.20 — this is a lower bound that we impose

19

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18 FERNANDEZ-VILLAVERDE AND JONES

Figure 6: Estimates of R0t = βt/γ

Mar Apr May

2020

0

0.5

1

1.5

2

2.5

3

R0(t

)

= 0.010 =0.10 =0.20

New York City (only)Lombardy, Italy

Atlanta

Stockholm, Sweden

SF Bay Area

Figure 7: Percent of the Population Currently Infectious

20

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22 FERNANDEZ-VILLAVERDE AND JONES

Figure 9: New York City: Daily Deaths per Million People (δ = 1.0%/0.8%/1.2%)

Apr May Jun Jul Aug Sep

2020

0

10

20

30

40

50

60

70

80

90

Dai

ly d

eath

s per

mil

lion p

eople

New York City (only)

R0=2.7/1.0/1.4 = 0.010 =0.05 =0.1 %Infect=26/27/31

DATA THROUGH 19-MAY-2020

Figure 10: New York City: Cumulative Deaths per Million (Future, δ = 1.0%/0.8%/1.2%)

Mar Apr May Jun Jul Aug Sep

2020

0

500

1000

1500

2000

2500

3000

3500

Cum

ula

tive

dea

ths

per

mil

lion p

eople

New York City (only)

R0=2.7/1.0/1.4 = 0.010 =0.05 =0.1 %Infect=26/27/31

= 0.01 = 0.008 = 0.012

DATA THROUGH 19-MAY-2020

the implications of these high infection rates for herd immunity and re-opening.

The next set of graphs show results for Spain together with robustness to different

21

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ESTIMATING AND SIMULATING A SIRD MODEL 23

Figure 11: Spain: Cumulative Deaths per Million People (γ = .2/.1)

Mar 11 Mar 25 Apr 08 Apr 22 May 06 May 20

2020

0

100

200

300

400

500

600

700

800

900

Cum

ula

tive

dea

ths

per

mil

lion p

eople

Spain

R0=2.4/0.6/0.7 = 0.010 =0.05 =0.1 %Infect= 8/ 9/ 9

DATA THROUGH 19-MAY-2020

values of γ, the rate at which cases resolve. By construction, our method for

recovering a time-varying R0t means we can fit the data with either parameter

value. In our earlier working paper, we found that γ = 0.2 fit the data better

when we had less flexibility in choosing the R0 values. Moreover, recall γ = 0.2

corresponds to an average period of infectiousness of 5 days, consistent with the

epidemiological literature. Figures 11 and 12 show the results. Spain is estimated

to have reduced R0 from an initial value of 2.4 to 0.6 by early May. Figure 13

suggest that the cumulative number of deaths per million in Spain may level off

at around 840.

Next, we show how different values of the recovery-time parameter θ affect our

results. Figure 14 shows the daily death numbers for Italy. The fit is good across a

range of values for θ, including our benchmark value of θ = 0.1 but also values of

0.07 (in red) and 0.2 (in green).

22

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24 FERNANDEZ-VILLAVERDE AND JONES

Figure 12: Spain: Daily Deaths per Million People (γ = .2/.1)

Apr May Jun Jul Aug Sep

2020

0

5

10

15

20

25

30

Dai

ly d

eath

s p

er m

illi

on

peo

ple

Spain

R0=2.4/0.6/0.7 = 0.010 =0.05 =0.1 %Infect= 8/ 9/ 9

DATA THROUGH 19-MAY-2020

Figure 13: Spain: Cumulative Deaths per Million (Future, γ = .2/.1)

Mar Apr May Jun Jul Aug Sep

2020

0

100

200

300

400

500

600

700

800

900

Cu

mu

lati

ve

dea

ths

per

mil

lio

n p

eop

le

Spain

R0=2.4/0.6/0.7 = 0.010 =0.05 =0.1 %Infect= 8/ 9/ 9

= 0.2 = 0.15DATA THROUGH 19-MAY-2020

23

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ESTIMATING AND SIMULATING A SIRD MODEL 25

Figure 14: Italy: Daily Deaths per Million People (θ = .1/.07/.2)

Apr May Jun Jul Aug Sep

2020

0

2

4

6

8

10

12

14

16

18

20

Dai

ly d

eath

s per

mil

lion p

eople

Italy

R0=2.2/1.1/1.1 = 0.010 =0.05 =0.1 %Infect= 8/ 9/11

DATA THROUGH 19-MAY-2020

Figure 15: Italy: Cumulative Deaths per Million (Future, θ = .1/.07/.2)

Mar Apr May Jun Jul Aug Sep

2020

0

200

400

600

800

1000

1200

Cum

ula

tive

dea

ths

per

mil

lion p

eople

Italy

R0=2.2/1.1/1.1 = 0.010 =0.05 =0.1 %Infect= 8/ 9/11

= 0.1

= 0.07

= 0.2

DATA THROUGH 19-MAY-2020

24

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ESTIMATING AND SIMULATING A SIRD MODEL 27

Figure 16: Madrid (7 days): Daily Deaths per Million People

Apr May Jun Jul Aug Sep

2020

0

10

20

30

40

50

60

70

Dai

ly d

eath

s per

mil

lion p

eople

Madrid, Spain

R0=2.6/0.2/0.3 = 0.010 =0.05 =0.1 %Infect=18/18/18

DATA THROUGH 19-MAY-2020

Figure 17: Lombardy, Italy (7 days): Daily Deaths per Million People

Mar Apr May Jun Jul Aug Sep

2020

0

10

20

30

40

50

60

70

Dai

ly d

eath

s per

mil

lion p

eople

Lombardy, Italy

R0=2.5/1.1/1.3 = 0.010 =0.05 =0.1 %Infect=22/24/27

DATA THROUGH 19-MAY-2020

25

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28 FERNANDEZ-VILLAVERDE AND JONES

Figure 18: New York City (7 days): Daily Deaths per Million People

Apr May Jun Jul Aug Sep

2020

0

10

20

30

40

50

60

70

80

Dai

ly d

eath

s p

er m

illi

on

peo

ple

New York City (plus)

R0=2.6/0.5/0.9 = 0.010 =0.05 =0.1 %Infect=22/23/23

DATA THROUGH 19-MAY-2020

Figure 19: New York City (7 days): Cumulative Deaths per Million (Future)

Mar Apr May Jun Jul Aug Sep

2020

0

500

1000

1500

2000

2500

3000

3500

Cu

mu

lati

ve

dea

ths

per

mil

lio

n p

eop

le

New York City (plus)

R0=2.6/0.5/0.9 = 0.010 =0.05 =0.1 %Infect=22/23/23

DATA THROUGH 19-MAY-2020

In Figure 20, the lines change noticeably as each new day provides new data.

Notice that the latest parameter values suggest the R0 fell in California from 1.5

26

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30 FERNANDEZ-VILLAVERDE AND JONES

Figure 21: California (7 days): Daily Deaths per Million People

Apr May Jun Jul Aug Sep Oct

2020

0

1

2

3

4

5

6

Dai

ly d

eath

s p

er m

illi

on

peo

ple

California

R0=1.5/1.0/1.0 = 0.010 =0.05 =0.1 %Infect= 2/ 2/ 5

DATA THROUGH 19-MAY-2020

estimation for the past but assumes no feedback between behavior and daily

deaths, i.e. by setting α = 0. In this case, the swings in daily deaths are must

greater with deaths peaking above 20 per day rather than around 5 per day across

the different estimates. The key lesson here is that feedback matters tremen-

dously for future outcomes.

Returning to the baseline case of α = 0.05, Figure 23 shows the cumulative num-

ber of deaths in California going forward. By July, simulation results suggest any-

where from 200 to 300 deaths per million. This compares to a current stock of

deaths of around 100 per million.

United Kingdom. A similar illustration of this uncertainty is present in the graphs

for the United Kingdom. Figure 24 shows the changing futures as different death

numbers come in. R0 is estimated to have fallen from 2.4 at the start of the

pandemic to 1.1 today. The percent ever infected in the U.K. is estimated to be

8 percent as of early May.

The cumulative forecast is then shown in Figure 25. The number of predicted

27

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36 FERNANDEZ-VILLAVERDE AND JONES

Figure 29: Boston (7 days): Cumulative Deaths per Million, Log Scale

Mar Apr May Jun Jul Aug Sep Oct

2020

1

2

4

8

16

32

64

128

256

512

1024

2048

4096

Cum

ula

tive

dea

ths

per

mil

lion p

eople

Boston+Middlesex

R0=2.1/1.2/1.5 = 0.010 =0.05 =0.1 %Infect=15/20/32

New York City

Italy

Figure 30: Sweden (7 days): Daily Deaths per Million People

Apr May Jun Jul Aug Sep

2020

0

2

4

6

8

10

12

14

16

18

Dai

ly d

eath

s p

er m

illi

on

peo

ple

Sweden

R0=2.1/1.0/1.1 = 0.010 =0.05 =0.1 %Infect= 6/ 8/12

DATA THROUGH 19-MAY-2020

28

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Reopening and herd immunity

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Reopening and herd immunity

• The disease will die out as long as:

R0t · St/N < 1

• That is, if the “new” R0t is smaller than 1/s(t).

• Today’s infected people infect fewer than 1 person on average.

• We can relax social distancing to raise R0t to 1/s(t).

• Note, however, the importance of “momentum.”

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Why random testing is so valuable

— Percent Ever Infected (today) —δ = 0.5% δ = 1.0% δ = 1.2%

New York City (only) 51 26 22Lombardy, Italy 43 22 19New York 31 16 13Madrid, Spain 36 18 15Detroit 36 18 15New Jersey 37 19 16Stockholm, Sweden 36 18 15Connecticut 33 17 14Boston+Middlesex 29 15 12Massachusetts 29 15 12Paris, France 21 11 9Philadelphia 23 12 10Michigan 18 9 8Spain 17 8 7Italy 15 8 7Illinois 13 7 6Sweden 12 6 5Pennsylvania 12 6 5United States 9 5 4New York excluding NYC 8 4 3Los Angeles 5 3 2Florida 3 2 1California 3 2 1 30

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Using percent susceptible to estimate herd immunity, δ = 1.0%

Percent R0t+30 PercentSusceptible with no way back

R0 R0t t+30 outbreak to normal

New York City (only) 2.7 0.8 73.5 1.4 30.3Lombardy, Italy 2.5 0.9 77.5 1.3 23.4New York 2.6 0.7 83.8 1.2 26.4Madrid, Spain 2.6 0.2 81.5 1.2 43.2Detroit 2.4 0.5 81.6 1.2 37.6New Jersey 2.6 1.1 78.3 1.3 11.4Stockholm, Sweden 2.6 1.2 78.3 1.3 7.2Boston+Middlesex 2.1 0.7 84.9 1.2 32.9Massachusetts 2.1 1.0 83.3 1.2 21.3Paris, France 2.4 0.2 89.4 1.1 42.0Philadelphia 2.5 0.9 87.2 1.1 17.0Spain 2.4 0.5 91.5 1.1 29.8Chicago 2.2 0.9 87.0 1.1 18.0Illinois 2.0 0.9 91.2 1.1 15.3Sweden 2.1 0.9 92.7 1.1 15.2Pennsylvania 2.1 0.8 93.0 1.1 19.5United States 2.0 0.9 94.7 1.1 13.1New York excluding NYC 2.0 1.1 92.8 1.1 -2.3Los Angeles 1.6 1.0 96.2 1.0 5.4Florida 1.6 0.9 98.0 1.0 15.3California 1.5 1.0 97.5 1.0 -3.4 31

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Simulations of re-opening

• Begin with the basic estimates shown already.

• Different policies are then adopted starting around May 20.

• Black: assumes R0t(today) remains in place forever.

• Red: assumes R0t(suppress)= 1/s(today).

• Green: we move 25% of the way from R0t = “today” back to initial R0t = “normal.”

• Purple: we move 50% of the way from R0t = “today” back to initial R0t = “normal.”

• We assume these R0t values stay in place forever.

• In practice, over course, βt would likely start to fall again as mortality rises.

32

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ESTIMATING AND SIMULATING A SIRD MODEL 47

Figure 35: Spain: Re-opening

that is, with an extra 30% of infections over those required to achieve herd immu-

nity.

This means that we want to reach the threshold R0(t)s(t) < 1 or stay around it

with very few infectious individuals to minimize “overshoot” infections. While

setting up and solving an optimal control problem of the COVID-19 epidemic in

the tradition of Morton and Wickwire (1974) to get to such an objective is beyond

the scope of our paper, our empirical results can help to calibrate re-opening

scenarios such as those quantitatively explored in Baqaee, Farhi, Mina and Stock

(2020).

33

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48 FERNANDEZ-VILLAVERDE AND JONES

Figure 36: Italy: Re-opening

Figure 37: New York City: Re-opening

34

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48 FERNANDEZ-VILLAVERDE AND JONES

Figure 36: Italy: Re-opening

Figure 37: New York City: Re-opening

35

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ESTIMATING AND SIMULATING A SIRD MODEL 49

Figure 38: New York excluding NYC: Re-opening

Figure 39: Los Angeles: Re-opening

36

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ESTIMATING AND SIMULATING A SIRD MODEL 49

Figure 38: New York excluding NYC: Re-opening

Figure 39: Los Angeles: Re-opening

37

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50 FERNANDEZ-VILLAVERDE AND JONES

Figure 40: Stockholm, Sweden: Re-opening

Figure 41: Chicago: Re-opening

38

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50 FERNANDEZ-VILLAVERDE AND JONES

Figure 40: Stockholm, Sweden: Re-opening

Figure 41: Chicago: Re-opening

39

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ESTIMATING AND SIMULATING A SIRD MODEL 51

Figure 42: Massachusetts: Re-opening

40

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More progress on βt

• Can we understand the evolution of βt (i.e., initial and final level, rate of decay)?

• This might help us to forecast its evolution.

• Also, it might help us map changes of βt into concrete policies.

• Two points:

1. Agents react endogenously to information: Cochrane (2020), Farboodi, Jarosch, and Shimer (2020), and

Toxvaerd (2020).

2. Economists like to think at the margin.

41

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More progress on βt (continued)

• We looked at:

1. Fraction of housing units located in an urban environment.

2. Population density per square kilometer.

3. Average annual temperature in degrees Celsius.

4. log real GDP/personal income per capita.

• Urbanization and income are significant, but both marginally and, for income, with a surprising sign.

• We do not take this results are anything but a suggestion there are no obvious patterns there.

42

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More progress on βt (continued)

• We map changes of βt into measures of policies.

• A proxy of the effects of policies: Mobility Trends Reports from Apple Maps.

• However, this proxy mixes voluntary and compulsory reductions in mobility and causality is hard to

ascertain.

• Significant correlation between λ and reductions in average mobility (with and without additional

controls).

• Correlation triggered by driving. Walking and mass transit per se are not significant.

43

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λ vs. mobility

44

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λ vs. mobility

45

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λ vs. mobility

46

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λ vs. mobility

47

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Heterogeneity

• We know heterogeneity is key, for instance, for mortality (age, pre-existing conditions).

• Also, for patterns of behavior and social contact.

• Role of super-spreaders and nursing homes.

• Introduction movement across territories.

• Heterogeneous-agents SIRD model. Among many others, Acemoglu et al. (2020) and Berger,

Herkenhoff, and Mongey (2020).

48

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Spain (all)

49

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Spain (under 65)

50

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Spain (over 75)

51

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Super-spreaders

0 10 20 30 40 50 60 70 80 90 1000

10

20

30

40

50

60

70

80

90

100

Ever

infe

cte

d, perc

enta

ge

R0 high is 3.00, R0 low is 1.25

R0 high is 1.78, R0 low is 1.78

R0 high is 0.75, R0 low is 0.75

52

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Super-spreaders (continued)

0 10 20 30 40 50 60 70 80 90 1000

10

20

30

40

50

60

70

80

Infe

cte

d, perc

enta

ge

R0 high is 3.00, R0 low is 1.25

R0 high is 1.78, R0 low is 1.78

R0 high is 0.75, R0 low is 0.75

53

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Super-spreaders (continued)

0 10 20 30 40 50 60 70 80 90 1000

10

20

30

40

50

60

70

80

90

100

Ever

infe

cte

d, perc

enta

ge

R0 high is 3.00, R0 low is 1.25

Super-spreaders

Regular

54

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Super-spreaders (continued)

0 10 20 30 40 50 60 70 80 90 1000

10

20

30

40

50

60

70

80

90

Infe

cte

d, perc

enta

ge

R0 high is 3.00, R0 low is 1.25

Super-spreaders

Regular

55

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Other exercises

• We can take the results that we get from our estimation and undertake policy exercises.

• Take, for instance, the point estimates for NYC, including a R0 = 4.1.

• We model a vaccine.

• Success rate of the vaccine: 75% of vaccinated do not get infected and, of the 25% who do get

infected, only 25% can transmit it (relatively conservative assumption given the clinical success of

other vaccines; recall: COVID-19 has a very different structure than the Influenza virus).

• 90% vaccination rate.

• You can effectively control the epidemic.

56

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Ever infected

0 20 40 60 80 100 120 140 160 180 2001

1.2

1.4

1.6

1.8

2

2.2

Ever

infe

cte

d, perc

enta

ge

57

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Ever infected (continued)

0 20 40 60 80 100 120 140 160 180 2001

1.5

2

2.5

3

3.5

4

4.5

Ever

infe

cte

d, perc

enta

ge

Non-vaccinated

Vaccinated

58

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Currently infected

0 20 40 60 80 100 120 140 160 180 2001

1.5

2

2.5

3

3.5

4

4.5

Ever

infe

cte

d, perc

enta

ge

Non-vaccinated

Vaccinated

59

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Currently infected (continued)

0 20 40 60 80 100 120 140 160 180 2000

0.2

0.4

0.6

0.8

1

1.2

Infe

cte

d, perc

enta

ge

Non-vaccinated

Vaccinated

60

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Cumulate deaths

0 20 40 60 80 100 120 140 160 180 2000

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

Cum

ula

te d

eath

s, perc

enta

ge

Non-vaccinated

Vaccinated

61

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Conclusions

• Time-varying β (or R0t) needed to capture social distancing, by individuals or via policy.

• Is the death rate 0.8% or 1.0% or ??? Random sampling!

• “One size fits all” will not work for re-opening.

• Susceptible rates are heterogeneous.

• We can employ rich models for policy analysis.

• But one needs to be cautious.

62