Question A:
Clearing the market for surgical face masks using prices is detrimental to the public good.
Responses
Responses weighted by each expert's confidence
Question B:
Laws to prevent high prices for essential goods in short supply in a crisis would raise social welfare.
Responses
Responses weighted by each expert's confidence
Question C:
Governments should buy essential medical supplies at what would have been the market price and redistribute according to need rather than ability to pay.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Very thorny question. UK thinking about making "profiteering" illegal. Efficient to raise prices but not equitable.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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Market clearing will lead the masks to go to those with the highest ability to pay, not the most need.
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 Nicholas Bloom |
Stanford | Bio/Vote History | ||
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This is like war time rationing - face masks should go to those who need them not those who pay most
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 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Wearing a mask = producing a public good. There should be helicopter drops of masks over deprived areas.
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Ultra high prices are not necessary incentives and they are clearly detrimental to the public good.
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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 Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Did Not Answer | Bio/Vote History | |
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Francesco Giavazzi |
Bocconi | Bio/Vote History | ||
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Mask mainly protects others, not user, so externality very strong
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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As there are strong externalities involved, e.g. in hospital personnel, the usual allocational efficiency arguments do not apply fully.
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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 Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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 Costas Meghir |
Yale | Bio/Vote History | ||
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Price caps lead to shortages. The government and international organizations should channel funds to ensure all concerned can afford masks
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 Peter Neary |
Oxford | Bio/Vote History | ||
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Classis results of Weitzman suggest that quantity controls are desirable when marginal benefits are inelastic relative to costs
-see background information here -see background information here |
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 Kevin O'Rourke |
Oxford | Bio/Vote History | ||
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Just look at what is happening in Italy!
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Torsten Persson |
Stockholm University | Bio/Vote History | ||
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The effect on the public good depends a great deal on whether a credible (=enforceable) constraint can be put on face-mask quality.
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 Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
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Wearing a mask protects others and people will not pay for this part of the benefit. They should be subsidised
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 Richard Portes |
London Business School | Bio/Vote History | ||
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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depends on the trade off between short term distributional goals of the current stock versus longer term incentives for production.
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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While some price controls might help, effective regulation to eliminate low-quality products is probably more important.
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 John Van Reenen |
LSE | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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In a crisis there has to be a better way than the price mechanism to allocate such goods, but will governments establish one?
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Depends on the elasticity of supply
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 Beatrice Weder di Mauro |
The Graduate Institute, Geneva | Did Not Answer | Bio/Vote History | |
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 Karl Whelan |
University College Dublin | Bio/Vote History | ||
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If there are shortages of PPE for medical staff then there is higher social value to getting them this equipment than others.
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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There already is a black market. Price fixing will further develop this market.
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 Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Again a very difficult issue.
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Pol Antras |
Harvard | Bio/Vote History | ||
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But I can only see this working on a very temporary basis.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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This might decrease supply and be costly. But rationing may get the goods to those who have the most time and need.
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Nicholas Bloom |
Stanford | Bio/Vote History | ||
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Pros and cons
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Only if some technology is available to distribute the goods evenly.
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Did Not Answer | Bio/Vote History | |
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Francesco Giavazzi |
Bocconi | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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May need more than price control laws to improve allocation in such circumstances
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Price ceilings would deter production, without necessary implications for allocation, hence ceilings will lead to welfare losses.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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There are equity or inequality issues related to price gouging but they can be (better) addressed with policy in question 3.
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Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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Costas Meghir |
Yale | Bio/Vote History | ||
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Again the price mechanism will ensure entry where most needed. Government subsidies can solve the affordability problem.
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Peter Neary |
Oxford | Bio/Vote History | ||
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Same response applies as to A): on both efficiency and equity grounds, allocating by quantity not price is better in a crisis
-see background information here -see background information here |
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Kevin O'Rourke |
Oxford | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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The government should provide financial support to poor people who cannot afford such goods, rather than tring to control their price.
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Torsten Persson |
Stockholm University | Bio/Vote History | ||
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Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
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Let prices rise but government should subsidise purchases by lower income groups
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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if production capacity is, fixed high prices equal rents and can be regulated. but if not, firms need incentives to invest in new capacity
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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John Van Reenen |
LSE | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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It depends how good the rationing mechanism is. And beware adverse supply response.
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Beatrice Weder di Mauro |
The Graduate Institute, Geneva | Did Not Answer | Bio/Vote History | |
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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Even if there was a theoretical argument for this (and that's unclear) price restrictions are hard to enforce in practice.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Isn't it better to provide support to the people with low income and those who lost their jobs (as many countries actually do)?
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Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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In pronciple this sounds a good idea, but it depends what prices the government pays and how the purchase is financed.
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Pol Antras |
Harvard | Bio/Vote History | ||
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This seems like a good idea, but I worry about how well implemented it would be. Perhaps I'm particularly skeptic because of where I live.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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Clearly the best solution if it can be achieved. A small risk of cronysm in distribution, but worth taking
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Nicholas Bloom |
Stanford | Bio/Vote History | ||
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Governments (especially in the EU) should group their procurements in order to reap market power.
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Depends: If there is hoarding and runs on products, intervention helps; if it disrupts the supply chain (parts of ventilators), it does not
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Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Did Not Answer | Bio/Vote History | |
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Francesco Giavazzi |
Bocconi | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Government may want to pay more than old market clearing price to induce supply response
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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That is a way to ridge the gap between efficiency and a more broadly defined concept of welfare.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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Costas Meghir |
Yale | Bio/Vote History | ||
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Peter Neary |
Oxford | Bio/Vote History | ||
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To earlier arguments can be added the externalities associated with mass innoculation: huge social benefits irrespective of ability to pay
-see background information here |
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Kevin O'Rourke |
Oxford | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Torsten Persson |
Stockholm University | Bio/Vote History | ||
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Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
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Supplies would then be efficient and policy would reduce inequality
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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John Van Reenen |
LSE | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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But easier said than done
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Beatrice Weder di Mauro |
The Graduate Institute, Geneva | Did Not Answer | Bio/Vote History | |
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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Where there are shortages, allowing prices to rise is one way to get supply up. Getting equipment to medical staff should be first priority.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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