Bayesian Investor Blog

I recently made a bet with Robin Hanson that US COVID-19 deaths will be less than 250,000 by Jan 1, 2022 (details hiding in these Facebook comments).

I gave a few hints here about my reasons for optimism (based on healthweather.us). I’ll add some more thoughts here, but won’t try to fully explain my intuitions. Note that these are more carefully thought out than my reasoning at the time of the bet, and the evidence has been steadily improving between then and now.

First, a quick sanity check. Metaculus has been estimating about 2 million deaths from COVID-19 worldwide this year. It also predicts that diagnosed cases will decline each quarter from this quarter through at least Q4 2020, and stabilize in Q1 2021 at 1/10 the rate of the current quarter, suggesting that most deaths will occur this year.

U.S. population is roughly 4% of the world, suggesting a bit over 80k deaths if the U.S. is fairly average. The U.S. looks about a factor of 5 worse than average as measured by currently confirmed deaths, but a bit of that is due to a few countries doing a poorer job of confirming the deaths that happen (Iran?), and more importantly, the Metaculus forecasts likely anticipate that countries such as India, Brazil, and Indonesia will eventually have a much higher fraction of the world’s deaths than is the case now. So I’m fairly comfortable with betting that the U.S. will end up well within a factor of 3 of the world per capita average.

I was about 75% confident in late March that R0 had dropped below 1, and my confidence has been slowly increasing since then.

Note a contrary opinion here. It appears to produce results that are slightly pessimistic, due to assuming that testing effort hasn’t increased.

Yet even if it’s currently a little bit above 1, there’s still a fair amount of reason for hope.

Many people have been talking as if strict shelter-in-place rules (lockdowns) are the main tools for keeping R0 < 1. That’s a misleading half-truth. Something like those rules may have been critical last month for generating quick coordination around some drastic and urgent changes. But the best longer-term strategies are less drastic and more effective.

One obstacle to lowering R0 is that hospitals are a source of infection. I’m pretty sure that will be solved, on a lousy schedule that’s unconnected with the lockdowns.

Within-home transmission likely has a significant effect on R0. Lockdowns didn’t cause any immediate drop in that transmission, but that transmission drops a good deal as the fraction of people who have been staying at home for 2+ weeks rises, so R0 is likely declining now due to that effect.

Most buildings that are open to the public should soon require good masks for anyone to enter. It wasn’t feasible to include such a rule in the initial lockdown orders, but there’s a steady move toward following that rule.

I expect those 3 changes to reduce R0 at least 20%, and probably more, between late March and late April.

Robin is right to be concerned about the competence of institutions that we relied on to prevent the pandemic. Yet I see modest reasons for optimism that the U.S. will mostly use different institutions for test and trace: Google, Apple, LabCorp, etc., and they’re moderately competent. Also, most institutions are more competent at handling problems which they recall vividly than they are at handling problems which have been insignificant in the lifetimes of most executives.

We can be pretty sure based on China’s results that R0 < 1 is not a narrow target. Wuhan got R0 lower than the key threshold by a factor of something like two. They did that in roughly the worst weather conditions – most of the time, warmer (or occasionally colder) weather will modestly reduce R0. So we’ll be able to survive a fair amount of incompetence.

But there’s still plenty of uncertainty about whether next week’s R0 will be just barely acceptable, or comfortably below 1.

Deliberate Infection?

The challenges of adapting to the most likely scenarios took nearly all of my attention in March. So I had no remaining slack to adequately prepare for a scenario that looked unlikely to me, but which looked likely to Robin. For one thing, I ought to have evaluated the possibility that money will be significantly more valuable to me if Robin wins the bet than if he loses.

It is certainly possible to imagine circumstances where deliberate coronavirus infection is quite valuable. But it looks rather low value in the scenario I think we’re in.

I don’t have much hope of getting a sensible program of deliberate infection in a society that couldn’t even stockpile facemasks in February.

I also see only a small chance that talking about deliberate infection now will help in a future pandemic. I expect this to be humanity’s last major natural pandemic (note: I’m too lazy today to evaluate the relevance of bioterrorist risks). I don’t know exactly how we’ll deal with future pandemics, but the current crisis is likely to speed up some approaches that could prevent a future virus from becoming a crisis. Some conjectures about what might be possible within a decade:

• Better approaches to vaccination, such that vaccines could become widely available within a week of identifying the virus.
• Medical tricorders that are as ubiquitous as phones, and which can be quickly updated to detect any new virus.

Still, I do think deliberate infection should be tried in a few places, in case the situation is as desperate as Robin believes. I’ll suggest Australia as a top choice. It has weather-related reasons for worrying that the peak will come in a few months. It has substantial tuberculosis vaccination, which may reduce the death rate among infected people by a large margin (see Correlation between universal BCG vaccination policy and reduced morbidity and mortality for COVID-19: an epidemiological study).

Note that tuberculosis vaccination looks a good deal more promising than deliberate infection, so it should be getting more attention.

Other odds and ends

Some of the concerns about a lasting economic slowdown are due to expectations that the restaurant industry will be shut down for years. I expect many other businesses to reopen within months with strict requirements that everyone wear masks, but it’s rather hard to eat while wearing a mask. So I see a large uncertainty about which year the restaurant business will return to normal. Yet I also don’t see people who used to rely on restaurants putting up with cooking at home for long. I see plenty of room for improvement in providing restaurant-like food to the home.

Current apps for delivery from restaurants seem like clumsy attempts to tack on a service as an afterthought. There’s plenty of room to redesign food preparation around home delivery, in ways that more efficiently and conveniently handle more of the volume that restaurants were handling before.

We have significant unemployment among restaurant workers, combined with food being hard to acquire for reasons which often boil down to labor shortages (combined with rules against price gouging). That’s not the kind of disruption that causes a lasting depression. The widespread opposition to price gouging is slowing down the adjustments a bit, but even so, it shouldn’t be long before the unemployed food service workers manage to become redeployed in whatever roles are appropriate to this year’s food preparation and delivery needs.

Finally, what should we think about this news: SuperCom Ships Coronavirus Quarantine Compliance Technology for Immediate Pilot?