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Spatial Effects of COVID-19 Transmission in Mumbai

This article is on the spread of the coronavirus pandemic in the city of Mumbai with the pandemic considered as a local public bad with spillover effects across the wards of the city. Spatial econometric techniques are used to model these spillovers using both cross-section as well as panel data. The main conclusion of the article is that the significant spatial spillover effect across the wards of the city is likely to make the exit from the enforced lockdown a major challenge.

The ongoing COVID-19 pandemic, while causing much tragedy and distress, has, at the same time, spawned a lot of research in diverse areas. In fact, apart from research in epidemio­logy the WHO (2020) lists a staggering number of research papers on COVID-19 in a variety of disciplines in the last few months. Much of the research in the Indian context has focused on the devastating effects of the lockdown imposed by the Government of India from 24 March 2020 onwards (Kannan 2020; A Kumar 2020; Roy 2020). Another line of enquiry has focused on the spread of COVID-19 across the country. Almost all of these papers are still in a pre-publication form given the limited time available, and very few papers, if at all, have gone through any refereeing process (Singh and Adhikari 2020; Simha et al 2020; S Kumar 2020 and Pujari and Shekatkar 2020).

The characteristics of the COVID-19 pandemic suggest that there is much that one can draw from the literature in the theory of public goods. The classic reference here is, of course, Samuelson (1954) but the main results are well discussed in Atkinson and Stiglitz (1980) and also in Gruber (2013). The typical characteristics of a pure public good are (i) non-rivalry in consumption or equal consumption for all, and (ii) inability to exclude non-paying individuals from the benefits of the good. Since we are dealing with a pandemic that delivers negative benefits, its characteristics have to be carefully understood. Hence, what we are dealing with is not a public good but a public bad. However, the first characteristic of a public good still applies: one person suffering from the disease does not prevent other persons from “consuming” the disease at the same point of time. The COVID-19 is not used up when it afflicts one person and an additional person can be infected without reducing the opportunity for anyone else to be infected. In the public goods literature this is called additional provision at zero marginal cost (Oakland 1987). The second characteristics of non-exclusion has to be understood differently in the case of a public bad. An individual can exclude themselves from the negative benefits of a public bad only at a great cost like by installing air purifiers to improve the air quality at home. In the case of a pandemic, such measures include social distancing and lockdowns that are being currently enforced in many countries.

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Updated On : 7th Sep, 2020

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