Centre for Finance and Development
18 December 2020

Economic incentives and regulation to increase COVID-19 app effectiveness

Contact tracing apps are a promising response to the COVID-19 pandemic, but too few people use them. Professor Nathan Sussman offers some economic explanations for non-use and proposes incentives to overcome them.

In a new article on VoxEU, Nathan Sussman, Full Professor in International Economics and Pictet Chair in Finance and Development, addresses the reasons why many people do not use COVID-19 contact tracing apps. In Switzerland, only 21% of the population use the SwissCovid app, while take-up of 60% would be desirable for the app’s effectiveness. Data also shows that contact tracing has become ineffective during the second wave of infections in several European countries

From a review of survey results and previous research, Professor Sussman concludes that the often-cited lack of trust in the government is not a credible explanation for the apps’ low take-up. Instead, there are economic reasons behind non-use. In particular, using the app means potentially having to quarantine. Quarantine involves economic and social costs – forgoing income and social contacts.


These measures take significant time to be effective, and COVID-19 is not waiting. Therefore, we recommend immediately using easy-to-implement financial incentives and regulation.


For incentivising more people to use the app, Professor Sussman proposes a holistic policy including education, public campaigns, trust-building, accountability, and nudging. One of his concrete proposals to tackle the economic and social costs of quarantine is to guarantee paid leave to everyone who has to quarantine following an app notification. Potentially, these persons could also be provided with vouchers for delivery services or even for entertainment services like Netflix to make the quarantine more agreeable.


Read the full article here on VoxEU, where it was posted on 18 December 2020.

On 27 October 2020, the Graduate Institute hosted an event with several experts from Switzerland and abroad discussing economic incentives for the use of COVID-19 tracing apps. A video recording of this event is available.