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Economics Assignment

Introduction on Covid Safe App Analysis

COVIDSafe app is an essential part of Australian government’s attempt to contain the spread of COVID19 in the country. With this app, it is possible to identify the people who are exposed to Corona virus. It is very important to isolate the people who are in close contact with infected patient. The apps can trace out all the contacts of the users of the apps and stored all the information in encrypted government server. The information is moved to the health authorities of the state in the event when a contact is infected or test positive to COVID 19. The apps have an array of privacy and security safeguards so that it ensures user’s privacy protection. (Australiangovernmentdepartmentofhealth, 2020)

Body of Covid Safe App Analysis

II.A Contact tracing apps: an overview

Several countries have released similar types of apps in different names specifically designed to speed up the process of contact tracing. China is the first country to launch such contact tracing apps and later it has been widespread in many other countries. China’s QR coding system is designed in Alipay app to know the health status of the user. Singapore has launched first Bluetooth contact tracing solution names as Trace Together. It is well known that Italy is one of the worst affected country by the ongoing pandemic. Italy is the first European country that has rolled out such contact tracing apps known as “Immuni” that has reported 2.2 million downloads in first ten days of its release. Germany has also launched its own version of contact tracing app.

II.B The rationale behind the COVIDSafe app:

Australia, like other countries are experiencing the ongoing public health crisis of coronavirus. The rationale behind contact tracing apps is nothing but to stop the coronavirus transmission, protect and save the lives and livelihood of millions. In order to make it effective, high rate of adoption is required. Suh apps has gained wide support across the countries that has considered as a critical and valuable tool to fight against the local outbreak and community spread of the virus. (PrimemininsterofAustralia, 2020)

The more people would connect the app, faster the country can prevent the spread of the virus and protect the lives of Australians. While releasing the apps, Australian government has kept a target of 40% Australian adults to download the apps. But in reality, the reported download number is far less than the target level. (Julie Lee, 2020)

II.C Application of economic principle in COVIDSafe apps:

COVIDSafe apps is one of the key pre requisite to stop the spread of the virus and reopen the economy. A team of Oxford University researchers have confirmed the fact that contact tracing apps along with other interventions has the potential to stop the spread of the virus and also help to reopen the economy. Such apps can help to control the virus from rapidly reemerging. The model has confirmed the fact that if 60% of country’s population use and adhere the apps recommendations, then it is possible to stop the endemic. Contact tracing apps is an integral part of the combined effort planning to come out from devastating lockdowns. (UniversityofOxford, 2020)

We can analyze Pareto optimal and sub optimal solution for COVIDSafe apps with the help of an economic model of externality. Contact tracing apps is case of positive externality where the use of the apps by an individual increases the well -being of others in the community but he is not being compensated for that. In case of positive consumption externality, the sup optimal solution is obtained. Pareto optimal solution for COVIDSafe apps uptake can be achieved at the point where marginal social benefit curve intersects the social marginal cost curve. But market only provides suboptimal solution which is below the optimal level. (Nicholas Gregory Mankiw, 1997)

II.D Policies to increase the adoption rate of COVIDSafe apps:

In order to spur the action both monetary and non-monetary incentive can be effective.

Monetary incentive

 Some economists have proposed some financial incentives to make the use of apps more appealing. For example, Joshua Gans and Richard Holden have suggested a rebate of $10 on the pone bills for those who has the Contact Tracing apps in their phone. Monetary incentives are definitely effective measure that would make the apps more attractive to sign up. According to economic principle, it is always better to conduct a cost -benefit analysis before launching of any new scheme. Since it is associated with public health that has been dealt with utmost priority, the benefit related with the apps are claimed to be greater than the cost associated monetary incentive. (Holden, 2020)

 Behavioral economics approach (non-monetary incentive)

The number of downloads of COVIDSafe contact tracing apps was definitely impressive in the first three days of its release. But the download numbers have gradually slowed down to a significant extent. Australian government has set up the target for 40% of Australians or 10 million people to use the app but the actual download numbers are far to reach the golden goal. Though the apps are very effective and a vital toll for the government’s action to combat the public health crisis, the use of the apps is not satisfactory. There is an urgent need to widespread the use of apps. Similar response has been received in other countries like Singapore or Israel. Singapore’s Trace Together app and Israel’s Shield app has also not performed better. It is very important to use the behavioral approach to increase the adoption rate. (Freyens, 2020)

Behavioral theory proposed the nudges that would help to improve the adoption rate of the apps. With some changes in the policies, communication, schemes and systems, it would help to encourage Australians to behave in a better and socially desirable way. Empirical evidence confirms the fact that behavioral research provides significant help in other health related issues that includes increase in organs donation rate or the cancer screening rate. As far as the contact tracing apps is concerned, it is better to apply behavioral economics approach with different forms of nudges. The simplest form of nudge is to repeat the information, repeating the information to use the contact tracing apps can be quite effective. The second form of nudge is to understand the importance of social norms. The third nudge is to create trust among the Australians about the contact tracing apps. It can only be possible if the information comes from the people who has considerable influence among the population. For example, if the nudges come from the respected members of the family like doctors or nurses then it can create a deeper impact on the people. For example, the tweet of Nobel Laureate peter Doherty about his signing up in the app is likely to influence many. Overall, these three forms of nudges as proposed by behavioral economists will help to encourage and motivate the people to use the COVIDSafe apps and taking the download numbers closer to the government’s goal. (Freyens, 2020)

Conclusion on Covid Safe App Analysis

COVIDSafe apps is one of the most critical tools that can help to protect the health of the community people through alerting quickly. Despite the fact that contact Tracing apps are widely recognized around the world including Australia, the adoption rate is not much impressive. According to the latest available government figures, 6.13 million Australians have downloaded the apps. Though the download figures in the first three days were much appealing, the download curves are becoming flatter overtime. Both monetary incentive and behavioral approach can be applied to increase the download numbers. (Meixner, 2020)

References for Covid Safe App Analysis

Australiangovernmentdepartmentofhealth, 2020. COVIDSafeapp. [Online]
Available at: https://www.health.gov.au/resources/apps-and-tools/covidsafe-app#about-the-app
[Accessed 19 September 2020].

Freyens, J. H. &. B., 2020. Contact tracing apps: a behavioural economist’s guide to improving uptake. [Online]
Available at: https://theconversation.com/contact-tracing-apps-a-behavioural-economists-guide-to-improving-uptake-137157
[Accessed 19 September 2020].

Holden, R., 2020. Vital Signs: Modelling tells us the coronavirus app will need a big take-up, economics tells us how to get it. [Online]
Available at: https://theconversation.com/vital-signs-modelling-tells-us-the-coronavirus-app-will-need-a-big-take-up-economics-tells-us-how-to-get-it-136944
[Accessed 19 September 2020].

Julie Lee, J. S. &. P. G., 2020. COVID-19: COVIDSafe downloads may be more about understanding people than about the design of processes. [Online]
Available at: https://www.news.uwa.edu.au/2020052712117/covid-19-coronavirus/covid-19-covidsafe-downloads-may-be-more-about-understanding-peop?page=show
[Accessed 19 September 2020].

Meixner, S., 2020. How many people have downloaded the COVIDSafe app and how central has it been to Australia's coronavirus response?. [Online]
Available at: https://www.abc.net.au/news/2020-06-02/coronavirus-covid19-covidsafe-app-how-many-downloads-greg-hunt/12295130
[Accessed 19 September 2020].

Nicholas Gregory Mankiw, ‎. G. M., 1997. Principles of Microeconomics. s.l.:The Dryden Press.

PrimemininsterofAustralia, 2020. COVIDSAFE: NEW APP TO SLOW THE SPREAD OF CORONAVIRUS. [Online]
Available at: https://www.pm.gov.au/media/covidsafe-new-app-slow-spread-coronavirus
[Accessed 19 September 2020].

UniversityofOxford, 2020. Digital contact tracing can slow or even stop coronavirus transmission and ease us out of lockdown. [Online]
Available at: https://www.research.ox.ac.uk/Article/2020-04-16-digital-contact-tracing-can-slow-or-even-stop-coronavirus-transmission-and-ease-us-out-of-lockdown
[Accessed 19 September 2020].

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