Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on Twitter (@joshgans) or subscribe to this email newsletter here. (I am also part of the CDL Rapid Screening Consortium. The views expressed here are my own and should not be taken as representing organisations I work for.)
Yesterday, Governor Whitmer of Michigan announced a re-opening plan. It is to progressively reduce restrictions as certain vaccine thresholds are met. At 70% there is full re-opening.
This is perhaps the most sensible policy plan that I have seen in this pandemic. It makes vaccine hesitancy not an individual problem but a social one. And it gives society a reward for getting the job done.
It reminds me somewhat of an incentive plan I enacted in toilet training my second child — something that I wrote about in Parentonomics. Here is the story:
[T]raining our son (Child No.2) proved to be a very different ball game from training our first daughter — and not simply due to gender differences, which some believe are significant in these things. You see, our daughter possessed several qualities that helped us when applying incentives. First, she was highly strategic and easily understood what rewards meant. Second, she had some basic motives — most notably food — that made it easy to give her high-motive rewards. Put simply, she was her father’s child.
Our son possessed neither of these qualities. He was not strategic and hardly had a self-interested bone in his body. He didn’t care about much that was material. For him, toilet training was something that was going to please us, and for that reason he was interested. Read him a book and he would stay on the potty. The attention was enough. This all seemed to suggest that we might be able to get results for a song.
Nonetheless, there was very little progress. So we decided to implement the more explicit incentive system, which had worked (kind of) well with Child No. 1. But there was a twist: Child No. 1 was now around, and in many ways, we needed her help. She could easily detract from our efforts if not fully on board.
So the new plan became this: Child No. 2 would receive a sweet reward — one or two jelly babies, as the case may be. But also, whenever he was successful, Child No. 1 would receive the same. We viewed this as a team effort, and Child No. 1 was part of the team. To align her incentives we gave her a share of the pie.
That part worked swimmingly. She encouraged our son to sit on the potty and spent time showing him books. It seemed that we may have efficiently outsourced this activity: something valuable in our time-strapped lives.
Basically, the idea was to make it a team event. Whitmer has just done the same for vaccines.
The idea of tying re-opening to vaccine thresholds makes everyone focus on that number. Its simplicity makes it somewhat superior to my own suggestion last week that we just use re-opening to push people to be vaccinated. But each is similar in spirit. Point everyone towards what is going to happen.
Let’s look at the details of the plan. They are summarised in this infographic:
• Step 1 — 55% of Michiganders (4,453,304 residents), plus two weeks: Allows in-person work for all sectors of business.
• Step 2 — 60% of Michiganders (4,858,150 residents), plus two weeks: Increases indoor capacity at sports stadiums to 25%, increases indoor capacity at conference centers/banquet halls/funeral homes to 25%, increases capacity at exercise facilities and gyms to 50%, lifts the curfew on restaurants and bars.
• Step 3 — 65% of Michiganders (5,262,996 residents), plus two weeks: Lifts all indoor % capacity limits, requiring only social distancing between parties, further relaxes limits on residential social gatherings.
• Step 4 — 70% of Michiganders (5,667,842 residents), plus two weeks: Lifts the Gatherings and Face Masks Order such that MDHHS will no longer employ broad mitigation measures unless unanticipated circumstances arise, such as the spread of vaccine-resistant variants.
Michigan has a long way to go with only 31% fully vaccinated and another 11% having received one dose. But I can imagine that the person who pushes them over each threshold will be celebrated and that itself will get others involved.
The tough part here is sticking to this commitment. In the footnotes to infographic — that are somewhat hard to read — we get the fine print:
MIOHSA may delay implementation if new cases remain >250 daily/million as a seven-day average at the time of implementation.
MDHHS may delay implementation in a MERC region if new cases remain >250 daily/million as a seven-day average at the time of implementation.
In other words, if vaccines do not work to reduce prevalence sufficiently overall or in a smaller region, all bets are off. This makes sense because of Covid-19 was raging all bets would be off. At least this way, it is not a broken promise.
This is beautifully designed and it wouldn’t surprise me if it becomes a template for everywhere else.
Of course, when you play a game you have to worry about gaming. I found this out with my toileting training scheme.
Alas, it was not quite to be. We had to put a stop to it all when we discovered Child No. 1 feeding Child No. 2 copious amounts of water to help the process along! (By the way, in case you’re wondering, Child No. 1 was four years old at the time.)
We met most of our objectives there still but this was certainly an unintended consequence.
What is great about the Michigan scheme is that it ties the re-opening to a government measured figure. Vaccine passports and the like always have the issue that people might fraudulently report they are vaccinated in order to get special treatment. But this scheme — while in many ways the same set of incentives — occurs at a state level with state recorded vaccines that would be hard to manipulate in a significant way. Thus, there seems to be little room for gaming.
In the end, it is so nice to have some sensible and innovative policy-making going on. We need much more of it.