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August ETF flows: Once more unto the breach

August ETF flows: Once more unto the breach

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By Matthew J. Bartolini, Head of SPDR Americas Research, State Street Global Advisors.

Matthew J Bartolini, Head of SPDR Americas Research

Matthew J Bartolini, Head of SPDR Americas Research.

In the third act of Shakespeare’s seminal play, King Henry V utters, “Once more unto the breach, dear friends, once more.”

The words are intended to motivate the king’s troops amid continuous assaults on the gaps of the city walls during the siege of Harfleur. The motivation was necessary, as the weary English forces were beaten back and unsure about their prospects for victory. To forge ahead, courage and steely resolve were essential.

With the standard 60/40 portfolio sitting on current year-to-date gains against a backdrop of an elevated risk regime, investors may need to find a similar steely resolve today. As summer turns to fall, global capital markets face five key risks:

  • The pandemic – COVID-19 cases continue to rise around the world, albeit more slowly, creating confusion and delaying any return to normalcy. In many parts of the world, the weather is starting to turn colder, and the pandemic will converge with flu season. However, not all pandemic risks are to the downside: There have been encouraging advances with regard to a potential vaccine and more robust testing.
  • The re-opening of schools – Whether online-only, hybrid, or in-person, back-to-school season amid the pandemic will be inherently disruptive, confusing, and lead to an array of potential risks. Pitfalls in this new abnormal range from increased case rates as people congregate more regularly to heightened stress and potential lack of productivity for parents juggling work while ensuring their children are able to learn.
  • Earnings season without the low bar – Sizeable second-quarter earnings surprises fueled gains over the last few months. In the S&P 500 Index, 84% of firms surprised to the upside by a magnitude of 23%, both record figures. The eye-popping results were made possible by a low bar: Second-quarter estimates were slashed 37%, also a record. Third-quarter earnings season is unlikely to have the same low bar, as estimates have actually improved by 3 percentage points since June. While still projecting a decline, without a vastly lowered bar and more data on post-pandemic operations, the price reaction from earnings season may not be the same. This environment isn’t confined to the US: Global earnings estimates haven’t been slashed to the same degree seen for the second quarter.
  • Elevated valuations – US stocks have not been this richly valued since the dot-com era, and by some metrics (e.g., next twelve-month price-to-earnings ratio), stocks are trading at higher valuations than during the dot-com era. Overseas, valuations are more constructive; however, considering that US equities make up more than 50% of global benchmarks, the nosebleed multiples do not portend a great margin of safety if investors no longer wish to pay more than $26 for next year’s earnings.
  • The election – For the rest of 2020, the US election is the proverbial elephant (and donkey) in the room. Over the next few weeks, rhetoric will intensify as heightened social unrest can no longer be separated from any election discussion. During September, the election will likely produce more noise than actionable news. Following the debates, more tangible information about candidate platforms and polling behavior will become available. Typically, autumn seasons with elections are more volatile than non-election autumns, a trend likely to continue given the unorthodox nature of this election cycle.

Asset class ETF flows: Bond funds still gaining, though record streak ends

For bond ETFs, the four-month streak of $20+ billion monthly inflows ended in August. As shown below, the asset class only took in $16 billion last month. Sizeable outflows from government funds dragged the segment lower, partially offsetting the strength in all other areas. Notably, the $16 billion figure is still above the five-year median for monthly flows of $10.5 billion.

Equity ETF flows remained somewhat constrained in August, even as the broader market rallied back to new all-time highs. The $17.3 billion inflow in August is below the five-year median figure of $20 billion. Flows into commodity funds continued to shine, led by precious metal exposures, including gold. In fact, while bond ETFs saw an end to their record streak, gold funds’ streak of more than $1 billion of monthly inflows continued in August. With an inflow of more than $2 billion last month, the record now stands at eight consecutive months.

Source: SSGA.

There isn’t much to read into the sub-median equity flows for August, as the historical relationship between flows and returns is loose at best. However, the below-median flows combined with near-median trading volumes for equity ETFs and stocks in the S&P 500 in August do suggest a low-participation rally. This is further reinforced by low positioning in S&P 500 futures (sitting in the 12th percentile over the last five years), and high cash positions as defined by money market assets (sitting in the 92nd percentile over the last five years and just shy of the max level following the onset of the pandemic).

Fixed income ETF flows: Strength across multiple segments

Bond ETFs have now amassed $142 billion this year. This is roughly $13 billion shy of the 2019 record, indicating that 2020’s full-year figure will likely set a new record. If we extrapolate the current year-to-date totals with the historical five-year median flow figure, the estimated full-year 2020 tally would be $183 billion. If we were to take a more aggressive approach and use the 2020 median of $19 billion, the 2020 calendar year flows could reach $220 billion. Either way, the question isn’t whether the 2019 record will be broken but by how much.

Taking a closer look at fixed income ETF flows, we see that only one bond sector had outflows in August, and six out of the eleven sectors had more than $1 billion of inflows, as shown below. The persistence of the inflows is also strong, as the same seven segments (Aggregate, Inflation Protected, Mortgage-Backed, IG Corporate, High Yield, and Municipals) all had inflows on more than 80% of the days in the last one, two, and three months. Some sectors are well north of 90%, having inflows on almost every day in the last few months. While certain segments (Aggregate, IG Corporate, and High Yield) have led in a somewhat concentrated fashion, the strength throughout the bond ETF ecosystem is a larger reflection of increasing usage across many client dimensions leveraging an array of portfolio implementation use cases.

Source: SSGA.

Sector-focused equity ETF flows: Investors favor cyclical segments over defensive

In aggregate, sector-focused equity ETFs posted inflows greater than $4 billion last month, marking the seventh month in 2020 with positive flows. As shown below, cyclicals outpaced defensives last month. Put another way, recovery sectors (Consumer Discretionary, Materials, and Real Estate) outpaced recession sectors (Utilities, Health Care, and Consumer Staples) when using the definitions we outlined in our 2019 study. Technology-focused ETFs continued to receive inflows, gaining $1 billion in August, and still lead sector flows year-to-date.

Source: SSGA.

Sector flows have followed returns, to a degree. Technology, Consumer Discretionary, and Industrial stocks all outperformed the S&P 500 in August, and these three sectors had the strongest flows. Beyond that, there is little connection, as returns in the Utilities sector were down on the month, but the segment produced inflows. Short interest noticeably declined in Utilities, so perhaps the inflows were related to short covering.

Overall, as the economy continues to re-open and be on the path to recovery, cyclical sectors are likely to benefit as consumption and industrial activity rebound closer to pre-pandemic levels. The one exception would be Real Estate: The sector has historically done well during recoveries, but the pattern isn’t poised to continue, given the ways in which the pandemic has upended trends in commercial real estate, i.e., less demand for office space given the rise of at-home work arrangements.

Flows into sector funds have topped $20 billion this year, at $24 billion, and that doesn’t include the $15 billion deposited into the nontraditional thematic ETFs. Those NextGen Trends funds, after posting a record $3 billion in June and July, took in over $4 billion in August. Their flows were led by funds targeting broad-based innovation, as well as strategies focused on firms creating more renewable forms of power generation. The traditional and thematic flows reflects specific investor behavior trend in 2020 – harnessing elevated dispersion and discretely positioning sectors based on market trends rather than indiscriminately buying broad beta

Looking ahead, investors may need steely resolve

As investors go once more unto the breach in a tumultuous 2020, fortitude may be necessary. Three potential tactics are worth considering as we forge ahead:

  • Diversification – Ensure portfolios are appropriately diversified with potential defensive positions, like gold, that may be able to parry any uptick in volatility.
  • Don’t panic – Nerves of steel may be required to avoid hasty changes to a strategic asset allocation mix. After all, some of the S&P 500’s best days have followed the worst.
  • Focus on the future – COVID-19 has created a new trend line for our society, and new innovative growth opportunities have emerged that may help position us for our new reality.

(The views expressed here are those of the author and do not necessarily reflect those of ETF Strategy.)

The post August ETF flows: Once more unto the breach first appeared on ETF Strategy.

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Government

Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide…

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Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide Black Lives Matter riots in the summer of 2020, some elite colleges and universities shredded testing requirements for admission. Several years later, the test-optional admission has yet to produce the promising results for racial and class-based equity that many woke academic institutions wished.

The failure of test-optional admission policies has forced Dartmouth College to reinstate standardized test scores for admission starting next year. This should never have been eliminated, as merit will always prevail. 

"Nearly four years later, having studied the role of testing in our admissions process as well as its value as a predictor of student success at Dartmouth, we are removing the extended pause and reactivating the standardized testing requirement for undergraduate admission, effective with the Class of 2029," Dartmouth wrote in a press release Monday morning. 

"For Dartmouth, the evidence supporting our reactivation of a required testing policy is clear. Our bottom line is simple: we believe a standardized testing requirement will improve—not detract from—our ability to bring the most promising and diverse students to our campus," the elite college said. 

Who would've thought eliminating standardized tests for admission because a fringe minority said they were instruments of racism and a biased system was ever a good idea? 

Also, it doesn't take a rocket scientist to figure this out. More from Dartmouth, who commissioned the research: 

They also found that test scores represent an especially valuable tool to identify high-achieving applicants from low and middle-income backgrounds; who are first-generation college-bound; as well as students from urban and rural backgrounds.

All the colleges and universities that quickly adopted test-optional admissions in 2020 experienced a surge in applications. Perhaps the push for test-optional was under the guise of woke equality but was nothing more than protecting the bottom line for these institutions. 

A glimpse of sanity returns to woke schools: Admit qualified kids. Next up is corporate America and all tiers of the US government. 

Tyler Durden Mon, 02/05/2024 - 17:20

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Spread & Containment

From Colombia to Laos: protecting crops through nanotechnology

In a recent breakthrough, DNA sequencing technology has uncovered the culprit behind cassava witches’ broom disease: the fungus genus Ceratobasidium….

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In a recent breakthrough, DNA sequencing technology has uncovered the culprit behind cassava witches’ broom disease: the fungus genus Ceratobasidium.

Credit: Alliance of Bioversity and CIAT / A. Galeon

In a recent breakthrough, DNA sequencing technology has uncovered the culprit behind cassava witches’ broom disease: the fungus genus Ceratobasidium.

The cutting-edge nanopore technology used for this discovery was first developed to track the COVID-19 virus in Colombia, but is equally suited to identifying and reducing the spread of plant viruses. The findings, published in Scientific Reports, will help plant pathologists in Laos, Cambodia, Vietnam and Thailand protect farmers’ valued cassava harvest.

“In Southeast Asia, most smallholder farmers rely on cassava: its starch-rich roots form the basis of an industry that supports millions of producers. In the past decade, however, Cassava Witches’ Broom disease has stunted plants, reducing harvests to levels that barely permit affected farmers to make a living,” said Wilmer Cuellar, Senior Scientist at the Alliance of Bioversity and CIAT.

Since 2017, researchers at the Alliance of Bioversity International and CIAT have incorporated nanotechnology into their research, specifically through the Oxford Nanopore DNA/RNA sequencing technology. This advanced tool provides insight into the deeper mysteries of plant life, accurately identifying pathogens such as viruses, bacteria and fungi that affect crops.

“When you find out which pathogen is present in a crop, you can implement an appropriate diagnostic method, search for resistant varieties and integrate that diagnosis into variety selection processes,” said Ana Maria Leiva, Senior Researcher at the Alliance.

Nanotechnology, in essence, is the bridge between what we see and what we can barely imagine. This innovation opens a window into the microscopic world of plant life and pathogens, redefining the way we understand and combat diseases that affect crops.

For an in-depth look at the technology being used in Laos and Colombia, please explore this link.


About the Alliance of Bioversity International and CIAT

The Alliance of Bioversity International and the International Center for Tropical Agriculture (CIAT) delivers research-based solutions that harness agricultural biodiversity and sustainably transform food systems to improve people’s lives. Alliance solutions address the global crises of malnutrition, climate change, biodiversity loss, and environmental degradation.

With novel partnerships, the Alliance generates evidence and mainstreams innovations to transform food systems and landscapes so that they sustain the planet, drive prosperity, and nourish people in a climate crisis.

The Alliance is part of CGIAR, a global research partnership for a food-secure future. www.alliancebioversityciat.org


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International

Public Health from the People

There are many ways to privately improve public health. Such responses make use of local knowledge, entrepreneurship, and civil society and pursue standard…

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There are many ways to privately improve public health. Such responses make use of local knowledge, entrepreneurship, and civil society and pursue standard goals of public health like controlling the spread of infectious diseases. Moreover, private responses improve overall welfare by lowering the total costs of a disease and limiting externalities. If private responses can produce similar outcomes as standard, governmental public health programs—and more—perhaps we should reconsider when and where we call upon governments to improve public health.

Two Kinds of Private Responses

Following Vernon Smith and his distinction between constructivist and ecological rationality, private actors can engage in two general kinds of public health improvements. They can engage in concerted efforts to improve public health, and they can engage in emergent responses through myriad interactions.1 Three stories below—about William Walsh, Martha Claghorn, and Edwin Gould—indicate concerted efforts to improve public health.

Walsh, a Catholic priest and President of the Father Matthew Society in Memphis, Tennessee, used the society to organize a refugee camp outside of the city and helped hundreds of people avoid yellow fever during the 1878 epidemic—one of the worst yellow fever epidemics in the country.2 Shortly after learning mosquitos carried diseases prior to 1901, Claghorn chaired the Civics committee of the Twentieth Century Club in the Richmond Hill area of Long Island and led a community-wide anti-mosquito campaign, which rid the area of potentially infectious mosquitos.3 After realizing that many of his employees were sick with malaria, Gould—president of the St. Louis Southwestern Railway—used his wealth and business firm to finance and develop an anti-mosquito campaign throughout Texas.4

These stories show how individuals recognize a public health problem given their circumstances and use their knowledge and available resources to resolve the problem. More recently, we might all be familiar with private, constructivist responses to Covid-19. We all made plans to avoid others and produce our desired amount of exposure. Many people made facemasks from old clothes or purchased them from facemask producers. Businesses, retailers, restaurants, and many others adapted in various ways to limit exposure for their workers and customers. My favorite example, albeit not relevant for most, is the so-called bubble that was implemented by the NBA, which housed teams, encouraged play, and limited infection. The NBA finished their season and crowned a 2020 champion only because of the privately designed and implemented bubble solution. The key is that the bubble pursued all of those objectives, not just one of them. All of these responses indicate how private interactions among people can minimize their exposure, through negotiation, discussion, and mutually beneficial means.

In addition to privately designed solutions, emergent public health responses are also important, perhaps even more so. Long-term migration and settlement patterns away from infectious diseases, consumption to improve nutrition, hygiene, sanitation, and the development of social norms to encourage preventative behavior are all different kinds of emergent public health responses. Each of these responses—developed through the actions of no one person—are substantial ways to improve public health.

First, consider how common migration operates as a means of lowering prevalence rates. As soon as people realized that living near stagnant bodies of water increased the probability of acquiring diseases like malaria, they were more likely to leave those areas and subsequently avoid them. Places with such features became known as places to avoid; people also developed myths to dissuade visitors and inhabitants.5 Such myths and associations left places like the Roman Campagna desolate for centuries. These kinds of cultural associations are also widespread; for example, many people in North and South Carolina moved to areas with higher elevation and took summer vacations to avoid diseases like malaria. East End and West End, in London, also developed because of the opportunities people had to migrate away from (and towards) several diseases.6

While these migration patterns might develop over decades, movement and migration also help in more acute public health crises. During the 1878 yellow fever epidemic throughout the southern United States, for example, thousands of people fled their cities to avoid infection. They took any means of transportation they could find. While some fled to other, more northern cities, many acquired temporary housing in suburbs, and many formed campsites and refugee camps outside of their city. The refugee camps outside of Memphis—like the one formed by William Walsh—helped hundreds and thousands of people avoid infection throughout the Fall of 1878.

Second, more mundane public health improvements—like improvements in nutrition, hygiene, and sanitation—are also emergent. These improvements arise from the actions of individuals and entrepreneurs, often closely associated with voluntary consumption and markets. According to renowned medical scientist Thomas McKeown, that is, rising incomes encouraged voluntary changes in consumption, which helped improve nutrition, sanitation, and lowered mortality rates.7 These effects were especially pertinent for women and mothers as they often selected more nutritious food and altered household sanitation practices. With advancing ideas about germs, moreover, historian Nancy Tomes argues that private interests advanced the campaign to improve house-hold sanitation and nutrition—full of advice and advertisements in newspapers, magazines, manuals, and books.8 Following Tomes, economic historians Rebecca Stein and Joel Mokyr substantiate these ideas and show that people changed their hygiene, sanitation, house-hold cleaning habits, and diets as they learned more about germs.9 Such developments helped people to provide their desired exposure to germs according to their values.

Obviously, there were concerted public health improvements during this time that also explain falling mortality rates. For example, waterworks were conscious efforts to improve public health and were provided publicly and privately, with similar, positive effects on health.10 The point is that while we might be quick to connect the health improvements associated with a public water system, we should also recognize emergent responses like gradual changes in voluntary consumption.

Finally, social norms or rules that encourage preventative behavior might also be relevant kinds of emergent public health responses. Such rules identify behavior that should or should not be allowed, they are enforced in a decentralized way, and if they follow from the values of individuals in a community.11 If such rules pertain to public health, they can raise the cost of infectious behavior or the benefits of preventative behavior. Covering one’s mouth when sneezing is not only beneficial from a public health perspective, it also helps avoid earning disapproval.

The condom code during the height of the HIV/AIDS epidemic is another example of an emergent public health rule that reduced infectiousness by encouraging safer behavior.12 People who adopted safer sexual practices were seen to be doing the right thing—akin to taking care of a brother. People who refrained from adopting safer sexual practices were admonished. No single person or entity announced the rule; rather, it emerged from the actions and interactions of individuals within various communities to pursue their goals regarding maintaining sexual activity and limiting the spread of disease. Indeed, such norms were more effective in communities where people used their social capital resources to determine which behaviors should be changed and where they can more easily monitor and enforce infractions. This seems like a relevant factor where many gay men and men who have sex with men live in dense urban areas like New York and Los Angeles that foster LGBTQ communities.

Covid-19 provides additional examples where social norms encouraged the use of seemingly appropriate behavior, e.g., social distancing, the use of facemasks, and vaccination. Regardless of any formal rule in place, many people adapted their behavior because of social norms that encouraged social distancing, the use of facemasks, and vaccination. In communities that valued such behaviors, people that wore face masks and vaccinated were praised and were seen as doing the right thing; people that did not were viewed with scorn. Indeed, states and cities that have higher levels of social capital and higher values for public health tend to have higher Covid-19 vaccine uptakes.13

Improving Public Health and More

“Private approaches tend to lower the total costs of diseases and they limit externalities.”

While these private approaches can improve public health, can they do more than typical public health approaches cannot? Private approaches tend to lower the total costs of diseases and they limit externalities. Each aspect of private responses requires additional explanation.

Responding to infectious diseases and disease prevention is doubly challenging because not only do we have to worry about being sick, we also have to consider the costs imposed by our preventative behaviors and the rules we might impose. Thus, the total costs of an infectious disease include 1) the costs related to the disease—the pain and suffering of a disease and the opportunity costs of being sick—and 2) the costs associated with preventative and avoidance behavior. While disease costs are mostly self-explanatory, the costs of avoiding infection warrant more explanation. Self-isolation when you have a cold, for example, entails the loss of potentially valuable social activities; and wearing condoms to prevent sexually transmitted diseases forfeits the pleasures of unprotected sexual activity. Diseases for which vaccines and other medicines are available are less worrisome, perhaps, because these are diseases with lower prevention costs than diseases where those pharmaceutical interventions are not available. Governmental means of prevention also add relevant costs. Many readers might be familiar with the costs imposed by our private and public responses to Covid—from isolation to learning loss, and from sharp decreases in economic activity to increased rates of depression and spousal abuse.14 Long before Covid, moreover, people bemoaned wearing masks during the Great Flu,15 balked at quarantine against yellow fever,16 and protested bathhouse closings with the onset of HIV.17

Figure 1 shows the overall problem: diseases are harmful but our responses to those diseases might also be harmful.

Figure 1. The Excess Burden of Infectious Diseases

This figure follows Bhattacharya, Hyde, and Tu (2013) and Philipson (2000), who refer to the difference between total costs and disease costs as the excess burden of a disease. That is, excess burden depends on how severely we respond to a disease in private and in public. The excess burden associated with the common cold tends to be negligible as we bear the minor inconvenience of a fever, a sore throat perhaps, or a couple days off work; moreover, most people don’t go out of their way to avoid catching a cold. The excess burden of plague, however, is more complicated; not only are the symptoms much worse—and include death—people have more severe reactions. Note too that disease costs rise with prevalence and with worsening symptoms but eventually decline as more severe diseases tend to be less prevalent. Still, no one wants to be infected with a major disease, and severe precautions are likely. We might shun all social interactions, and we might use government to impose strict quarantine measures. As disease severity rises along the horizontal axis, it might be the case that the cure is worse than the disease.

The private responses indicated above all help to lower the total costs of a disease because people choose their responses and they use their local knowledge and available resources to select cheaper methods of prevention. Claghorn used her neighborhood connections and the social capital of her civics association to encourage homeowners to rid their yards of pools of water; as such she lowered the costs of producing mosquito control. Similarly, Gould used the organizational structure of his firm to hire experts in mosquito control and build a sanitation department. These are cheap methods to limit exposure to mosquitos.

Emergent responses also help to lower the total costs of a disease because such responses indicate the variety of choices people face and their ability to select cheaper options. People facing diseases like malaria might be able to move away and, for some, it is cheaper than alternative means of prevention. Many people now are able to limit their exposure to mosquitos with screens, improved dwellings, and air conditioning.18 Consider the variety of ways people can limit their exposure to sexually transmitted diseases like HIV. If some people would rather use condoms to limit HIV transmission, they are better off doing so than if they were to refrain from sexual activity altogether. Similarly, some people would be better off having relatively risky sexual activity if they were in monogamous relationships or if they knew about their partner’s sexual history. That people can choose their own preventative measures indicates lower total costs compared with blunt, one-rule-for-all, governmental public health responses.

Negative and positive externalities of spreadable diseases indicate too much infectious behavior and too little preventative behavior, respectively. Hosting a party is fun, but it also incurs the internal costs of the drinks and appetizers and, more importantly, perhaps the external costs of raising the probability that people get sick. Attending a local cafe can be relaxing, but you have to pay for a cup of coffee and you might also transmit a disease to other coffee drinkers. The same could be said for many other public and social activities that might spread diseases like attending a class or a basketball game, transporting goods and people, and sexual behaviors. Our preventative behaviors from taking a vaccine to covering your mouth and from isolation to engaging in safer sexual practices emits positive externalities. If left unchecked, negative and positive externalities lead to higher rates of infection.

Overall, we should continue to think more critically about delineating how private and public actors can improve public health and overall welfare. More importantly, we should recognize that private actors are more capable than we often realize, especially in light of conscious efforts to improve public health and those efforts that emerge from people’s actions and interactions. These private efforts might be better at advancing some public health goals than public actors do. Individuals, for example, have more access to local knowledge and can discover novel solutions that serve multiple ends—often ends they value—rather than the ends of distant officials. Such cases and possibilities indicate cheaper ways to improve public health.


Footnotes

[1] Smith (2009), Rationality in Economics: Constructivist and Ecological Forms, Cambridge University Press.

[2] For more on Walsh, see Carson (forthcoming), “Prevention Externalities: Private and Public Responses to the 1878 Yellow Fever Epidemic,” Public Choice.

[3] For more on Claghorn, see Carson (2020), “Privately Preventing Malaria in the United States, 1900-1925,” Essays in Economics and Business History.

[4] For more on Gould, see Carson (2016), “Firm-led Malaria Prevention in the United States, 1910-1920,” American Journal of Law and Medicine.

[5] On the connection between malarial diseases, dragons, and dragon-slaying saints, see Horden (1992), “Disease, Dragons, and Saints: the management of epidemics in the dark ages,” in Epidemics and Ideas by Ranger and Slack.

[6] For more on migration and prevalence rates, see Mesnard and Seabright (2016), “Migration and the equilibrium prevalence of infectious disease,” Journal of Demographic Economics.

[7] The American Journal of Public Health published several commentaries on McKeown in 2002: https://www.ncbi.nlm.nih.gov/pmc/issues/130602/

[8] Tomes (1990), “The Private Side of Public Health: Sanitary Science, Domestic Hygiene, and the Germ Theory, 1870-1990,” Bulletin of the History of Medicine.

[9] Mokyr and Stein (1996), “Science, Health, and Household Technology: The Effect of the Pasteur Revolution on Consumer Demand,” in The Economics of New Goods, NBER.

[10] See Werner Troesken’s work on public and private waterworks in the U.S. around the turn of the 20th century. See Galiani, Gertler, and Shargrodsky (2005), “Water for Life,” Journal of Political Economy.

[11] Brennan et al., (2013), Explaining Norms, Oxford University Press.

[12] For more on the condom code, see Carson (2017), “The Informal Norms of HIV Prevention: The emergence and erosion of the condom code,” Journal of Law, Medicine and Ethics.

[13] Carilli, Carson, and Isaacs (2022), “Jabbing Together? The complementarity between social capital, formal public health rules, and covid-19 vaccine rates in the U.S.,” Vaccine.

[14] Leslie and Wilson, “Sheltering in Place and Domestic Violence: Evidence from Calls for Service During Covid-19.” Journal of Public Economics 189, 104241. Mulligan, “Deaths of Despair and the Incidence of Excess Mortality in 2020,” NBER, https://www.nber.org/papers/w28303. Betthauser, Bach-Mortensen, and Engzell, “A systematic review and meta-analysis of the evidence on learning during the Covid-19 Pandemic,” Nature Human Behavior, https://www.nature.com/articles/s41562-022-01506-4

[15] On the great influenza epidemic, see CBS News, “During the 1918 Flu pandemic, masks were controversial for ‘many of the same reasons they are today’.” Oct. 30, 2020. https://www.cbsnews.com/news/mask-1918-flu-pandemic-controversial/

[16] On yellow fever quarantine in Mississippi, see Deanne Nuwer (2009), Plague Among the Magnolias: The 1878 Yellow Fever Epidemic in Mississippi.

[17] On these closures, see Trout (2021), “The Bathhouse Battle of 1984.” https://www.sfaf.org/collections/beta/the-bathhouse-battle-of-1984/

[18] Tusting et al. (2017), “Housing Improvement and Malaria Risk in Sub-Saharan Africa: a multi-country analysis of survey data.” PLOS Medicine.


*Byron Carson is an Associate Professor of Economics and Business at Hampden-Sydney College in Virginia, where he teaches courses on introductory economics, money and banking, health economics, and urban economics. Byron earned his Ph.D. in Economics from George Mason University in 2017, and his research interests include economic epidemiology, public choice, and Austrian economics.


This article was edited by Features Editor Ed Lopez.


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