Peltzman Effect and Covid

As I write this blog, India is reeling under a second massive wave of Covid-19. So far India had done well relative to most major nations in managing Covid situation.

The death count was less and cases were not as bad as say in Europe or Brazil. In February of 2021 cases in India were less than 10K... (for a population of 1.3 billion that is negligible)

But since last few weeks there have been a very serious uptick in case load and specially in one western state of Maharashtra who's capital is Mumbai - India's financial hub. So what really happened? Well no one can exactly put a finger on this but we can make some educated guesses.

For one it is sure there's fatigue. By November of 2020, people were just plain tired. So they just went out and did not care much. More importantly there was wedding season in India in December to January time frame and clearly no one followed the "50 people gathering" rule.

(For the uninitiated - Indian weddings are usually huge social affair with lot of "show off". The more the number of people in wedding the bigger bragging rights you have as parents. But that's a different topic for another day)

Also in India for some reason the death rate was much lower relative to cases. Indian mindset generally is -"Dekha jayega" - which translates to - I don't care, we'll see what happens. Even if I get covid, I will sail through..

This casual approach coupled with the Peltzman Effect seems to have cost India dearly in last few weeks.

What is the Peltzman Effect?

Sam Peltzman taught microeconomics at Chicago in 1988. The Peltzman Effect is a theory which states that people are more likely to engage in risky behavior when security measures have been mandated. The Peltzman Effect is named for Sam Peltzman's postulation about mandating the use of seatbelts in automobiles - it would lead to more accidents. Safety perception increases risk appetite

With India giving vaccines at a very high rate to its population, those numbers on TV screens gave people a false sense of security and they increased their risky behavior.

They believed as vaccines take effect, the covid will recede. In theory that is true. But vaccines take a long time to take effect in human body. Anywhere from 6 weeks to 8 weeks for its full effect. And even after that there's a chance you'll be infected and spread the virus.

The Peltzman effect in fact started for most people even before they took the vaccine. Many people felt protected just looking at the vaccination numbers. The mask usage, social distancing and hand sanitization became progressively less. While this is attributed mainly to pandemic fatigue, the Peltzman effect cannot be ignored. 

Covid has no doubt exposed a lot of our blind spots. The most important being collective human behavior in event of crisis. While India reels through this along with rest of the world, how it manages itself and comes out of this crisis will have a lasting impact not only India but the rest of the world as well.


  1. This complacency or the false sense of security unfortunately fueled the second wave. Also when the vaccination rates were being published in the media, they were done so in terms of absolute numbers. Instead if they had been published in terms of percentage of the population, it could have had a more humbling effect on the viewers and would have prevented risky behavior.


Post a Comment