Contagious Disease Economics - General

Does social distancing matter?

According to a working paper by Greenstone and Nigam (2020), the answer is a resounding yes!

…we project that moderate social distancing would save 1.7 million lives between March 1 and October 1, with 630,000 due to avoided overwhelming of hospital intensive care units. Using the projected age-specific reductions in death and age-varying estimates of the value of a statistical life (VSL), we find that the mortality benefits of social distancing are over $8 trillion or $60,000 per US household. About 90% of the monetized benefits are projected to accrue to people age 50 or older. Overall, the analysis suggests that social distancing initiatives and policies in response to the COVID-19 epidemic have substantial economic benefits.

The authors claim the benefits are and larger than the entire annual federal budget. The benefits are monetarily equivalent to giving every household $60,000, which is approximately the median US household income.

1 Comment

  1. But it might have large economic costs that aren’t considered: “While it is tempting to undertake a full cost-benefit analysis of social distancing, this would require reliable estimates of its substantial costs. We are unaware of comprehensive estimates of these costs and their development is beyond the scope of our analysis, so the paper cannot go further than
    developing an estimate of the gross benefits of social distancing.”

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