I never imagined living through a global pandemic like the coronavirus. I was too young to remember both the dot com and the housing collapse (or maybe the effects of it weren’t too pronounced in my location in India). But the past few months, and more so the weeks, I see myself entrapped in a bubble layered with uncertainty, delusion, and optimism, in that order.
Impact on Markets
The first known cases of coronavirus began surfacing towards the end of December. Since then, the impact has been steady and unstoppable. It has now spread to over 114 countries, affecting 134,000 people, and causing 4,900 deaths. While the numbers in China seem to be declining, the rest of the world is going through its worst phase at the moment. The state I live in, dubbed the epicenter of the virus in the United States, has already witnessed 31 deaths and is said to brace for more.
The impact around the world has been catastrophic, with the hardest blows absorbed by the airlines (and other forms of travel), energy, and hospitality industries. The 20 richest people around the world lost a total of $78 billion in one day, as the market saw its worst dip since 1987. And amidst these losses, a few industries have reaped exceptional benefits from this pandemic:
a) Online education: More than 10,000 schools have temporarily been shut down in the U.S. affecting approximately 5 million children. While this impacts students’ learning potential and access to food for low-income families that depend on meal plans, it has boosted online educators such as Coursera, who saw a 47% spike in enrollment between January and February.
b) Remote work: All the major tech companies — Google, Amazon, Microsoft, Twitter, Salesforce, and more — have strongly advised employees to work from home. Some have even gone as far to make it mandatory for all employees. This turned out be a boon for videoconferencing platforms such as Zoom, Teams, and WebEx that saw 100%+ growth in usage.
c) E-commerce: As we battle through a cocooning period where people prefer to stay in, the food still needs to come from somewhere. While retail takes a major hit, e-commerce platforms see a boost. The sale of fresh foods on JD.com saw a 215% increase during a ten day period that ended on Feb 2nd. However, this is contingent upon an efficient supply chain, which has also taken a hit.
d) Biotechnology: While some companies brace for a negative impact in getting healthy volunteers for clinical trials, the pandemic has set off many others on a race to find a cure. Moderna’s scientists have already sent the first batch of a vaccine to the National Institute of Allergy and Infectious Diseases. Their stocks rose by 10% while the S&P fell by 12%.
e) At-home entertainment: The cocooning trend mentioned above will also result in people wanting to entertain themselves through binge watching series and playing video games. Interactive at-home exercise platform Peloton also saw a boost understandably, since gym rats will want a way to escape their increasingly sedentary lifestyle.
All in all, the impact is seen in the day-to-day lives of people in all the majorly affected countries.
Impact on People
I fear the achilles heel of a global pandemic would be the quirks of our psychological evolution beyond stock market decline and travel bans. The traits we developed over the several hundred million year evolution period — while undeniably useful for the particular era in which it was developed — could lead us to overestimating the impact of such diseases.
First and foremost, we hate uncertainty. We hate it even more than the certainty of a negative occurrence, as reported by a complex study that compared uncertainty to stress. When the odds of something happening (or not happening) is perceived to be 50%, our striatum (located deep in the basal ganglia, also known as the reward center) forces us to do something, anything, to improve those odds. It does this by activating the sympathetic nervous system that is responsible for the famous fight-or-flight response.
If traffic is going well and you’re likely to get to your meeting on time, there’s no need to fret, rush and worry. If you’re in a bumper-to-bumper jam, highly likely to be late, you might as well relax and think about making your excuses. But if it’s really touch and go, if your odds of making it on time approach 50%, that’s when you’ll try your hardest. And the prompt for that effort is stress. — The Guardian
The same can be applied to COVID-19. If we were safely shipped to an island where everyone was tested to be negative, we would happily go on with our days building rafts. On the other hand, if we knew with certainty that we had the virus and were nearing death, we would be devastated still but eventually accept our fate. But now, we live in a state of limbo, unsure of what precautions are enough and who might be a carrier.
Second, we love the availability bias. Okay, we don’t love it. But we fall prey to it. This bias leads us into thinking that the examples of things that come readily to mind are more representative than is actually the case. This doesn’t help us when we’re drowning in (mis)information.
In the US alone, the Centers for Disease Control and Prevention (CDC) estimates that 20,000 to 52,000 people have died from the common flu since October. And while older people and those with pre-existing respiratory conditions have cause for concern, a large majority of people who get coronavirus develop mild symptoms they can treat at home. — Quartz
Yet, we see people in Australia stockpiling toiler paper even though government officials have made it clear that it was not in short-supply and it is produced locally. We see people creating havoc on social media with falsely construed Clorox bottles. And, worst of all, state-backed media outlets in Iran and Russia have dubbed this as a U.S. promoted biological warfare. Somehow, misinformation is spreading faster and wider than the disease itself.
Hence, the aversion to uncertainty combined with this proclivity towards sensationalism leads to two concerning dichotomies. On the one hand, you have people who are selfish and misinformed, shutting themselves out of the worldly activities and stockpiling to no end (and possibly spreading misinformation). On the other hand, you have people who are selfish and careless, risking the lives of those around them knowingly by becoming a public hazard.
There is no ideal persona here, since our medical situation, trust in the government, and mandated rules decide some of our actions. But here are some better-than-average practices we can follow without putting ourselves and others at risk.
a) Do the obvious, even if it is obvious
We’ve heard it enough by now: wash your hands, don’t touch your face, cover your mouth while coughing. Yet, do we trust and follow it?
“People need to manage the fear that comes from feeling like you don’t have control over something as fundamental as your physical health and safety,” said Christopher J. Bryan, an assistant professor of behavioral science at the University of Chicago Booth School of Business. “If science is telling you the only thing you can do is wash your hands, that can feel unsatisfying because it’s a thing we already do regularly, so it doesn’t feel like it has any special protective power,” he added. — Washington Post
b) Don’t overestimate the impact
It’s easy to be startled by reading the news and looking at indexes that keep falling, but being updated of the true impact, specifically, impact in your locality, is important. If you want to understand the global impact, follow the numbers published by WHO in a dashboard. However, note that even WHO has inconsistencies in reporting the numbers, since the dynamics involved are too high.
c) If sick, stay in and advise others to do the same
If you begin displaying symptoms that match to the virus, quarantine yourself. There has been a lot of controversy around the availability of testing kits in the U.S., but there’s been more momentum now as the government made 2.1 million kits available and shipped them out to certified labs around the country.
Every time I read a clickbait-y op-ed that tries to instill fear, I’m frustrated that even with all this knowledge I can feel myself panicking to a lower degree. What is more disheartening is watching people use false facts to lash out against those who are innocent and practice xenophobia.
Somehow, this entire ordeal seems to be happening through a translucent pane as I watch from inside a bubble. Being a victim of psychic numbing, are we all are, I’m still comprehending the events as they unfold. But my goal is to do it with a high dose of rationality and compassion.