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COVID-19 Benefit Cost Analysis

Resources for Benefit-Cost Analyses to Inform COVID-19 Policymaking

May 14, 2020 update

This resource page is intended to help analysts and decision makers keep up with the rapidly growing policy analysis literature about interventions to address the COVID-19 pandemic. Studies seem to be forthcoming at a rate that almost approaches the speed at which the virus is spreading. As a service to the field, we are listing those studies that have come to our attention. We also look to readers to let us know if there are additional studies we should include.

At this stage in the pandemic, policy analyses will be inherently preliminary and reflect a higher level of imprecision than analyses of diseases and interventions where we have more history. But, each generation of studies can learn from and build on those that went before. So, we are listing virtually all the studies we find while recognizing that the specific policy comparisons being made and the underlying assumptions and estimates used must be considered somewhat tentative.

The Society expresses its thanks to all the analysts who have made early contributions to this literature. Part of being relevant is being timely, even when a lot of important information is missing or must be approximates. We look forward to seeing these early studies give rise to more thorough analyses.

We have listed studies in two categories. The first contains methodological studies from the Journal of Benefit-Cost Analysis that can guide efforts to assess policy responses to COVID-19. The second is the list of specific COVID-19 policy studies we have found that use benefit-cost analysis. If you know of something that should be added, please send a citation to info@benefitcostanalysis.org.


Relevant Methodological Material:

Here are a few resources that address how to assign a value to reductions in the risk of dying from COVID-19:

Benefit-Cost Studies of COVID-19 Policy Options

  •  The Benefits and Costs of Flattening the Curve for COVID-19, by Linda Thunström, Stephen Newbold, David Finnoff, Madison Ashworth, and Jason Shogren, March 2020 This paper analyzes the benefits and costs in the United States of social distancing relative to an uncontrolled scenario without distancing. It uses data from prior epidemics and from current press reports and analyses. The authors conclude that assuming that social distancing can substantially reduce contacts among individuals, we find net benefits of roughly $5 trillion in our benchmark scenario. Several sensitivity tests are included.
  • Does Social Distancing Matter? by Michael Greenstone and Vishan Nigam, Working Paper No. 2020-26, March 2020 This paper estimates the net mortality benefits in the United States of moving between two scenarios modeled by Ferguson et al. (2020): a no policy alternative and a mitigation scenario that combines home isolation of suspect cases, home quarantine of those living in the same household as suspect cases, and social distancing of the elderly and others at most risk of severe disease. The authors estimate that the mortality benefits of social distancing are over $8 trillion.
  • "Impact of non-pharmaceutical interventions (NPIs) to reduce COVID-19 mortality and healthcare demand." By Ferguson, Neil M., et al. March 16, 2020, London: Imperial College COVID-19 Response Team. This paper provides estimates of mortality rates under a variety of scenarios.
  • The Macroeconomics of Epidemics! by Martin S. Eichenbaumy, Sergio Rebeloz, and Mathias Trabandtx, March 23, 2020 This paper examines how decisions to cut back on consumption and work reduce the severity of an epidemic, as measured by total deaths, but also exacerbate the size of the recession caused by the epidemic. The authors find that the optimal containment policy increases the severity of the recession but saves roughly half a million lives in the U.S
  • The Loss from Pandemic Influenza Risk, by Victoria Y Fan, Dean T Jamison, and Lawrence H Summers. This paper looks at influenza pandemics in general to estimate loses relative to a no-epidemic scenario. Estimates are provided for countries at all income levels. 
  • Pandemics: Risks, Impacts, and Mitigation, by Nita Madhav, Ben Oppenheim, Mark Gallivan, Prime Mulembakani, Edward Rubin, and Nathan Wolfe This article provides a global perspective on the likelihood of pandemics, their effects, and policy steps to mitigate them.
  • This Time the Numbers Show We Cant Be Too Careful, by Cass Sunstein, Bloomberg Opinion, March 26, 2020, 12:30 PM EDT This brief policy piece summarizes some of the early COVID-19 benefit-cost studies and concludes that there is considerable danger in being overcautious in addressing the pandemic.
  • Confronting COVID-19: A Conversation with Columbia University Professor Scott Barrett, by Robert N. Stavins and Scott Barrett, Mar. 27, 2020 This 40-minute podcast interview starts with an overview of Professor Barretts career. At minute 17.5 it turns to his views on a wide range of issues related to international cooperation, pandemics, the role of science in society, and benefit-cost analysis (at minute 26.5).
  • Economic analysis of COVID-19 responses (part 1 and part 2) by Julian C. Jamison, Incidental Economist,April 1, 2020. These pieces highlight the importance of specifying both an intervention and counterfactual in public policy analyses; in this case a government lockdown policy compared with moderate social distancing (MSD). He goes on to summarize five studies that approximate that comparison and concludes most of the epidemiological gains come from MSD and in particular changing the behaviors of the most socially active individuals, the most at-risk individuals, and symptomatic individuals. These changes should occur early and be sustained throughout the crisis, but the marginal benefits of applying them to everybody else are relatively low.
  • Can masks help with reopening the economy? by Maria Polyakova, Jason Andrews, Stephen Luby and Jeremy Goldhaber-Fiebert. Stanford Institute for Economic Policy Research, April 2020 This blog post concludes that the available evidence about whether wearing masks will curtail the spread of infectious disease is weak but nevertheless supports encouraging wide spread mask use.
  • Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages? by Veronica Guerrieri, Guido Lorenzoni, Ludwig Straub, Iván Werning. April 2, 2020. This technical paper provides a detailed economic model of how a shock like the COVID-19 virus can affect the country. The authors use the model to assess the likely effectiveness of alternative macro policies being discussed. Werning provides a nice summary of the model on twitter.
  • Principles and Standards for Benefit-Cost Analysis of Public Health Preparedness and Pandemic Mitigation Programs, by Joseph Cook, Washington State University. This chapter illustrates issues that might arise in conducting economic analyses of public health preparedness or pandemic mitigation programs. Some of the issues raised have been debated extensively elsewhere, such as the choice of a social discount rate, the importance of sensitivity analyses, and the use of distributional weights. Other issues such as incorporating externalities or macroeconomic effects have received less attention in the economic evaluation literature. The chapter aims to begin a discussion of appropriate principles and standards on both types of issues
  • Covid-19 Infection Externalities: Trading Off Lives vs. Livelihoodsby Zachary A. Bethune and Anton Korinek, NBER Working Paper No. 27009, April 2020. This paper analyzes the externalities that arise when social and economic interactions transmit infectious diseases such as COVID-19. The authors show that private agents perceive the cost an additional infection to be around $80k whereas the social cost including infection externalities is more than three times higher, around $286k. This misvaluation has stark implications for how society ultimately overcomes the disease. They conclude that if targeting the infected is impossible, the optimal policy is still to aggressively contain and eliminate the disease, and the social cost of an extra infection rises to $586k.
  • Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy, by Fernandes, Nuno, March 22, 2020. This report discusses the economic impact of the Coronavirus/COVID-19 crisis across industries, and countries. It also provides estimates of the potential global economic costs of COVID-19, and the GDP growth of different countries based on data from 30 countries, under different scenarios. The report shows the economic effects of outbreak are currently being underestimated, due to over-reliance on historical comparisons with SARS, or the 2008/2009 financial crisis. 
  • Some Basic Economics of COVID-19 Policy: A look at the trade-offs we face in regulating behavior during the pandemicby Casey Mulligan, Kevin Murphy, and Robert Topel. This paper lays out the trade-offs involved with regulating the behavior of the general population during the COVID-19 pandemic.  It draws on the authors well-known work about the value of health (Kevin M. Murphy and Robert H. Topel, The Value of Health and Longevity, Journal of Political Economy, October 2006) and provides a useful list of what we already know and highlights some key unknowns that remain. It then compares relative advantages and disadvantages of large-scale social distancing regulation to a policy of screen, test, trace and quarantine.  One important point is that the authors find that the optimal type and timing of strategies depends critically on whether we expect to contain the pandemic long-term or until a vaccine or cure arises or whether we focus on minimizing the long-run costs of a pandemic that will run its course. 
  • How Much is a Human Life Actually Worth? As the US economy reopens amid a deadly pandemic, a dire question looms. Lets weigh the risksand do the math, by Adam Rogers. This well-written article in Wired give a nice history of the concept of the value of a statistical life and how that concept has been used in policy making. It then looks at how this value can inform the debate over responses to the COVID-19 pandemic.
  • On the Economic Benefits and Costs of COVID-19 Mitigation Measures in Mexicoby  Irvin Rojas. This paper calculates the daily flows of COVID-19 cases under the current scenario of recommended social distance and restricted economic activity, and under a counterfactual uncontrolled scenario with no mitigation measures. The author finds that the net cost of the control in terms of aggregate output is twice as large as the estimated benefits. Details about the methods and sensitivity tests are provided to help readers assess the application of that finding.
  • More to come..
  • /table


General COVID-19 Resources

  • The New England Journal of Medicine is making all of its articles related to COVID-19 available for free through its website.
  • The Journal of the American Medical Association also has a website with articles that summarize COVID-19 related medical care
  • How the Virus Got Out, by Jin WuWeiyi CaiDerek Watkins and James GlanzMarch 22, 2020. The New York Times provides a great graphic showing how international travel patterns spread the virus across the world. (Note: this graphic has a lot of data any may take a while to load on your computer.)
  • COVID Impact Survey. This philanthropy-supported national survey will offer national insights about the American populations experiences, including health, economic, and social well-being questions. Information will also be published as open data for use by policymakers and researchers. Statistics are also being developed for more than a dozen states and metropolitan areas, recognizing the regional impacts may vary substantially.
  • What Policymakers Can Do to Defeat COVID-19, by Vivian Ho and Heidi Russell, blog of Rice Universitys Baker Institute for Public Policy, April 13, 2020. This widely circulated blog, which includes lots of links to other sources, lists a number of treatment and policy options for addressing the pandemic.
  • Policy Implications of Models of the Spread of Coronavirus: Perspectives and Opportunities for Economistsby Christopher Avery, William Bossert, Adam Clark Glenn Ellison, Sara Fisher Ellison, NBER Working Paper 27007, April 2020.This paper provides a critical review of models of the spread of the coronavirus (SARS-CoV-2) epidemic that have been influential in recent policy decisions. There is tremendous opportunity for social scientists to advance the relevant literature as new and better data becomes available to bolster economic outcomes and save lives
  • NBER Papers on Health Economics.Not surprisingly, researchers in the National Bureau of Economic Research have produces a flood of papers on topics related to COVID-19 policies. In addition to the NBER papers listed elsewhere, here is a selected list of relevant papers as of April 20:
    • Estimating the COVID-19 Infection Rate: Anatomy of an Inference Problem by Charles Manski and Francesca Molinari w27023
    • The Subways Seeded the Massive Coronavirus Epidemic in New York City, by Jeffrey Harris w27021
    • Lock-downs Loneliness and Life Satisfaction, by Daniel Hamermesh w27018
    • How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey, by Alexander Bartik, Marianne Bertrand, Zoë B. Cullen, Edward Glaeser, Michael Luca, and Christopher Stanton  w26989

First Results from the COVID Impact Survey special note

Today the Data Foundation released the first week (April 20 - 26, 2020) of data collected in the COVID Impact Survey. The survey is an effort to provide national and regional statistics about physical health, mental health, economic security, and social dynamics in the United States during the coronavirus pandemic. 

The results released today provide reliable estimates at the national level as well as for 10 states and 8 metropolitan areas, including for California, Colorado, Florida, Louisiana, Minnesota, Missouri, Montana, New York, Oregon, Texas, Atlanta, Baltimore, Birmingham, Chicago, Cleveland, Columbus, Phoenix, and Pittsburgh.

The first week of data from the COVID Impact Survey validates the difficulties Americans are facing in the current pandemic are national, not regional, said Nick Hart, President of the Data Foundation. But the story about impacts is much more complicated when we look beneath the headlines. Our survey results also suggest variation in how individuals across the country are responding, with mixed compliance on CDC guidelines for wearing face masks, engaging in social distancing, and cancelling activities.

Key findings from the first week of data include:

  • The American public generally reported being in good physical health (87 percent), but identified high levels of perceived hopelessness (41 percent) one or more days of the last week
  • Respondents offered a relatively negative economic outlook, with 40 percent indicating it is unlikely they will be employed 30 days from now
  • While households across America are generally complying with CDC recommendations, low-income households are less compliant with wearing masks, avoiding public places, maintaining social distancing, and rescheduling activities
  • Almost one-third of households responded they were not likely at all to download a smart-phone application to track locations and send notifications related to COVID symptoms, with variation by region

The COVID Impact Survey is unique in that its methodological approach relies on an address-based random sample and also includes a range of questions about physical health, mental health, and economic security on a single survey. 

The survey was administered by NORC at the University of Chicago and the project is supported by the David and Lucile Packard Foundation, Alfred P. Sloan Foundation, and the Federal Reserve Bank of Minneapolis. Additional details about the COVID Impact Survey, including a complete de-identified, open dataset are available at www.covid-impact.org for ongoing research and analysis.

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