March 04, 2020
Why the Covid-19 numbers in Italy are rising faster than elsewhere
Number-crunching on the spread of Covid-19 is virtually useless because of two over-powering effects. One is measurement. The rise in Italian registered infections to over 2200 is primarily the result of massive public testing, which is not going on at nearly the same scale in Germany, for example, where the official number is 200. The second reason is that people are taking unprecedented precautionary measures, like washing their hands more frequently, avoiding large public gatherings and working from home. It is quite possible that those behavioural changes will impact the spread of the virus.
The Italian government is now recommending that people do not shake hands or embrace, keep a distance of one metre, and that anyone with a fever, especially the old, stay at home. There is quite a bit of volatility in the official data of daily new Italian Covid-19 cases, but they seem to be stabilising in a range of lower hundreds. As in China, the big rise in cases last week was due to changes in methodology. The evidence is from China is that public health measures taken there did slow down the spread of the virus.
The biggest risk, as ever, is virus mutation. This is what justifies the extreme precautionary measures taken by governments. For the moment the mortality rates seems to be around 2%, though we have seen estimates ranging from 1% to 3.5%. As the number of infections is likely to be under-reported by a larger factor than the number of deaths, we would conclude that the death rate is probably tilted towards the lower end of the scale. As it stands now, Covid-19 is nothing more than a very severe flu, but that could change.
Despite all the gloom, we think of at least one positive long-term effect. Decisions by companies like Twitter to get their employees to work from home could well result in a one-time productivity boost. Forecasts about the rise of home working did not come true in the 1990s, because telecommunications networks were not developed enough at the time. We would not be surprised if the current episode of home working would give rise to a new trend, which would also have positive effects for urban congestion, public transport systems and emissions. This could easily constitute the single biggest service-sector productivity shift in most of our lifetimes.