Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

COVID-19 Testing, ICMR and the Way Forward

Sometime back, the post “Rationality of Indian Testing Strategy and Chinese Flu” examined the course of Indian testing strategy and philosophy in reference to diagnosis of the Chinese flu. The synopsis of the post was summarized as ‘Contrary to the demands of the testing mafia, the focus should be on testing large numbers in areas worst affected by the Chinese flu rather than blind and random testing across the country’. The post had concluded that the then strategy of conservative testing was working well given the Chernoff bound and thus little need existed for the change as suggested by certain groups. In a recent post, “The Impossible Trinity of Chinese Virus”, it was posited an existence of an impossible trinity. A country cannot have conservative testing, open economy and low reproduction ratio simultaneously. These two posts at some level appear to contradict each other. As with any event, facts emerge necessitating a change in approach. The thought process is dynamic and hence perhaps at this juncture the debate on testing needs to be examined to validate or otherwise the conclusions derived from the past posts.

 

To be fair, India’s performance so far in its battle against the COVID-19 has been exceptional. The fatality rate officially is around 2.1% with the death incidence being under 30 per million. This is in contrast to countries like Belgium with around 900 per million, UK with around 700 per million or even US with around 460 per million. Further the total number of cases in India are fairly less compared to the rest of the world. The total number of cases might seem high in absolute terms but one has to factor in the Indian population as well. Contrary to doomsayers, India seems to have escaped the worst, the reasons for which might be many. If the deaths in India were to follow a trajectory of some of the European or American countries, India would have been experiencing at least half a million deaths with the worst scenario being close one and half million deaths. These in fact had been the projections by many a naysayer. But these naysayers have been proved wrong is testimony to the much maligned Indian administrative and governance capacity.

 

However, there comes a stage wherein the society has to look beyond and achieve a closure. India has a population of 140 crores and at even low reproduction ratios, the cases will continue to spread to larger areas. This is accentuated by the fact that economy has opened up and needs to be opened up further going forward. An economy in half-open mode will not be able to sustain for pretty long and brings with it numerous complications. Therefore, as economy needs to be spruced up, the Chinese flu must be contained.

 

The past posts have argued that South Korean strategy of testing was an outcome of circumstances and not deliberate choice as advocated by few. The initial outbreaks made it near impossible for the authorities to engage in contact tracing without explosion in the numbers. The infection was outpacing the ability to contact trace. Therefore, a mass testing was the only rational choice available. In fact, to their credit, South Korea managed to control the outbreak by testing just about two percent of the population. In contrast, the European countries have tested anywhere between 10-20% and more. Countries like UAE have tested nearly a third of their population. At this juncture India is close to testing 1.5% of its population. The current rate will require nearly a year to test around 15-20% of the population comparable to the Western countries. Given the possibility of infection outpacing testing, the numbers to be tested will have to be increased to manage the outbreak.

 

India too faces a similar moment like South Korea. Indubitably, daily testing in India is only perhaps second to the United States. India is testing around 5-6 lakhs per day. Yet given the population size, it is hardly sufficient. At this juncture, what is important is to identify early the positive patients whether symptomatic or asymptomatic, isolate them thus limiting the spread. Furthermore, as the economy opens, it is difficult to keep the people movement at bay. States like Karnataka or Andhra Pradesh or even Assam have faced outbreaks only because of this movement into the state from the other places. Quarantining the population on the large scale is becoming impossible both from the infrastructure point of view as also the monitoring point of view. Besides, the propensity to follow the rules in India is relatively low compared to countries say Japan. The high population and the close proximity with which people live in the country add to the woes of enforcing social distancing.

 

This is the stage wherein India needs to break away from the conservative testing model, a fact highlighted in the past posts too. India needs to scale up its testing to a large scale. India needs to be testing around 20-25 lakhs per day so as to cover one percent of the population per week and reach around 8-10% in about 10 weeks. This should by and large bring under control the positivity rate and keep abreast of the reproduction ratio. The hindrance to this more than the infrastructure is the policy governing the tests itself.

 

ICMR has been very conservative in approving the tests. They are keen to ensure the  tests have near 100% accuracy something possible only with RT-PCR. The other tests including rapid antigens are not 100% accurate and hence ICMR suggest the repeat testing of all those tested negative under alternative test with RT-PCR for confirmation. This in many ways has been barrier in the Indian testing process. In South Korea, this was given a go-by. The focus there was to get the positives as fast as possible without bothering about perfection. Type I errors or Type-II errors could be corrected through repeat testing but search for a perfection would have led to loss of time. This is the stage in India. Further loss of time would make our task difficult. Many a times, perfection becomes the enemy of the good and the ICMR policy currently is on the way towards the same.

 

ICMR should open up and liberalize the testing including testing without prescription and testing through multiple mechanisms. If there are doubts about the veracity of the results, the tests can be repeated. India must move to testing on demand. ICMR must approve other testing labs to offer their products to customers and not restrict to the current set of things. The private labs must be involved in wider way. Price discrimination through second degree must be encouraged with those who cannot afford the fees be tested in the government labs set up at different places accessible to all. Strategies must evolve to the changing context and it is one such situation which demands action from ICMR.

 

There is increasing fatigue over the pandemic. People are getting restless and want to get on with their lives. Yet the fear of contraction and possible mortality keeps them away. They want some solutions in sight. There is growing perception that a vaccine would be available by August 15 though it is extremely unlikely. The earliest the vaccine is likely to be available as the current trends would indicate would be perhaps early November with access to common men and women by end December or early January. In this context, the only way to defeat pandemic apart from social distancing and wearing masks would be very rapid testing. Very high levels of testing would ensure the testing outpaces infection. If a country or a region reports higher positivity rate, the only way it can be brought down is through increased testing. Therefore, at a positivity rate of around 9%, it is important to increase significantly to bring it down to around 5%. In fact, in this context, rather than the time consuming RT-PCR despite its accuracy, other tests like rapid antigen testing would be in order. Delhi for that matter seems to have come under control only through this mechanism. UP and Assam are couple of other examples of this strategy being adopted. Any delay might prove politically costly and thus it is in the interests we talk about tests on demand irrespective of the tests. Testing need not just be once but many times if demanded by a prospective patient. This seems the only feasible way to overcome the COVID woes.

 

 

 

 

 

 

 


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