The benefits of coronavirus suppression: A cost-benefit analysis of the response to the first wave of COVID-19 in the United States

Abstract

This paper estimates the benefits and costs of state suppression policies to “bend the curve” during the initial outbreak of COVID-19 in the United States. We employ an approach that values benefits and costs in terms of additions or subtractions to total production. Relative to a baseline in which only the infected and at-risk populations mitigate the spread of coronavirus, we estimate that total benefits of suppression policies to economic output are between $632.5 billion and $765.0 billion from early March 2020 to August 1, 2020. Relative to private mitigation, output lost due to suppression policies is estimated to be between $214.2 billion and $331.5 billion. The cost estimate is based on the duration of nonessential business closures and stay-at-home orders, which were enforced between 42 and 65 days. Our results indicate that the net benefits of suppression policies to slow the spread of COVID-19 are positive and may be substantial. We discuss uncertainty surrounding several parameters and employ alternative methods for valuing mortality benefits, which also suggest that suppression measures had positive net benefits.

Welfare economics of managing an epidemic: an exposition

“…Since the latter half of 2020, studies that analyze the costs and benefits of actual countermeasures against COVID-19 have emerged. Broughel and Kotrous ( 2021 ), Doti ( 2021 ), Scherbina ( 2021 ) and Thunstrom et al ( 2020 ) study stay-at-home orders of the USA, and Miles et al ( 2020 , 2021 ) and Rowthorn and Maciejowski ( 2020 ) focus on the lockdown in the UK. 18 In addition, based on the experiences in 2020, Scherbina ( 2021 ) evaluates the costs and benefits of introducing lockdown in early 2021.…”

“…Broughel and Kotrous ( 2021 ) and Scherbina ( 2021 ) review existing estimates of costs of stay-at-home orders in the USA, respectively. Then, they set similar figures for the cost per week; $357 billion by Broughel and Kotrous ( 2021 ) and $369.3 billion by Scherbina ( 2021 ).…”

“…Broughel and Kotrous ( 2021 ) and Scherbina ( 2021 ) review existing estimates of costs of stay-at-home orders in the USA, respectively. Then, they set similar figures for the cost per week; $357 billion by Broughel and Kotrous ( 2021 ) and $369.3 billion by Scherbina ( 2021 ). Thunstrom et al ( 2020 ) included the future decline in GDP in their costs, resulting in an estimate of $7.21 trillion, a much larger figure than the other studies.…”

“…Broughel and Kotrous ( 2021 ) and Scherbina ( 2021 ) considered the loss of quality of life due to morbidity and long COVID as well as the reduction in mortality losses. We should note that focusing only on fatality losses will result in underestimation because the latter occupies a nonnegligible part of total benefit.…”

“…We should note that focusing only on fatality losses will result in underestimation because the latter occupies a nonnegligible part of total benefit. According to Broughel and Kotrous ( 2021 ), mortality reduction benefits are estimated to be $317.7–$331.5 billion, whereas the total benefits are estimated to be $632.5–$765 billion. Broughel and Kotrous' ( 2021 ) estimate of the reduction in mortality losses belongs to the back-of-the-envelope calculation described above.…”