PANDEMIC/CONTACT TRACING APPS – Economic incentives and regulation to increase COVID-19 app effectiveness (Nathan Sussman, VOXEU)

The development of contact tracing apps was a promising response to the COVID-19 pandemic, but too few people appear to be using the apps to make them effective. This column offers three economic explanations for non-use: 1) the economic and social costs of quarantine, 2) underestimation of social externalities of app use, and 3) procrastination. It argues for the immediate application of carrots in the form of financial incentives and sticks in the form of regulation to accompany holistic policies that cover education, public campaigns, trust building, accountability, and nudging.