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Will widely available and effective tests for COVID-19 awaken the economy from its COVID induced coma? Paul Romer, for one, thinks so. But what will each person do with the information gleaned from the test? Should we expect someone who has tested positive for the virus to stay home and someone who has tested negative to go to work? If the first receives no compensation for staying home, she will leave for work. The second, anticipating that infected individuals have an incentive to go to work, will choose to stay home. As a result, the fraction of the population out and about will have an infection rate exceeding that in the population at large.

In a new paper by Rahul Deb, Mallesh Pai, Akhil Vohra and myself we argue that widespread testing alone will not solve this problem. Testing in concert with subsidies will. We propose a model in which both testing and transfers are targeted. We use it to jointly determine where agents should be tested and how they should be incentivized. The idea is straightforward. In the absence of widespread testing to distinguish between those who are infected and those who are not, we must rely on individuals to sort themselves. They are in the best position to determine the likelihood they are infected (e.g. based on private information about exposures, how rigorously they have been distancing etc.). Properly targeted testing with tailored transfers give them the incentive to do so.

We also distinguish between testing at work and testing `at home’. An infected person who leaves home to be tested at work poses an infection risk to others who choose to go outside. Testing `at home’ should be interpreted as a way to test an individual without increasing exposure to others. Our model also suggests who should be tested at work and who should be tested at home.

On the 3rd of July, 1638, George Garrard  wrote Viscount Wentworth to tell him:

The Plague is in Cambridge; no Commencement at either of the Universities this year.

On October 2nd of that same year, Cambridge canceled all lectures. Even if history does not repeat (but historians do), one is tempted to look to the past for hints about the future.

From the Annals of Cambridge  (compiled by Charles Henry Cooper ) we learn that the plague combined with the residency requirements for a degree at Oxford, prompted a rush of Oxford students to Cambridge to obtain their Masters of Arts degree. We know this from an anonymous letter to Oxford’s Chancellor:

…..many of Batchelor of Arts of Oxford came this Year for their Degrees of Masters of Arts here, which this Year they could not obtain at Oxford, which I endeavored to prevent……..

This prompted a complaint to Cambridge. Its vice-chancellor replied,

I Pray receive this assurance from me, and I doubt not but the Practice of our University will make it good……

Oxford, in the meantime, maintained country homes for its scholars where they could hide from the Black Death. The plague lowered property values which allowed the colleges to expand their land holdings.

What effect on the intellectual life of the University? Anna Campbell’s 1931 book entitled `The Black Death and Men of Learning‘ estimates that about a third of European intellectual leaders perished during the plague and Universities were in a precarious position.

James Courtenay, writing in 1980  with access to more detailed data about Oxford suggests a less bleak outcome.

The mortality rate was not particularly high , either of brilliant or of marginal scholars and masters. The enrollment levels across the next few decades do not seem to have been seriously affected.

He notes an argument for a drop in the quality of higher education but that would have been a response to a drop in the quality of primary education.

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