Cost–benefit analysis of age‐specific deconfinement strategies
I calibrate a Multiple‐Risk Susceptible–Infected–Recovered model on the covid pandemic to analyze the impact of the age‐specific confinement and polymerase chain reaction (PCR) testing policies on incomes and mortality. Two polar strategies emerge as potentially optimal. The suppression policy would...
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Published in | Journal of public economic theory Vol. 22; no. 6; pp. 1746 - 1771 |
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Main Author | |
Format | Journal Article |
Language | English |
Published |
Oxford
Blackwell Publishing Ltd
01.12.2020
Wiley |
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Abstract | I calibrate a Multiple‐Risk Susceptible–Infected–Recovered model on the covid pandemic to analyze the impact of the age‐specific confinement and polymerase chain reaction (PCR) testing policies on incomes and mortality. Two polar strategies emerge as potentially optimal. The suppression policy would crush the curve by confining 90% of the population for 4 months to eradicate the virus. The flatten‐the‐curve policy would reduce the confinement to 30% of the population for 5 months, followed by almost 1 year of free circulation of the virus to attain herd immunity without overwhelming hospitals. Both strategies yield a total cost of around 15% of annual gross domestic product (GDP) when combining the economic cost of confinement with the value of lives lost. I show that hesitating between the two strategies can have a huge societal cost, in particular if the suppression policy is stopped too early. Because seniors are much more vulnerable, a simple recommendation emerges to shelter them as one deconfines young and middle‐aged people to build our collective herd immunity. By doing so, one reduces the death toll of the pandemic together with the economic cost of the confinement, and the total cost is divided by a factor 2. I also show that expanding the mass testing capacity to screen people sent back to work has a large benefit under various scenarios. This analysis is highly dependent upon deeply uncertain epidemiologic, sociological, economic, and ethical parameters. |
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AbstractList | I calibrate a Multiple‐Risk Susceptible–Infected–Recovered model on the covid pandemic to analyze the impact of the age‐specific confinement and polymerase chain reaction (PCR) testing policies on incomes and mortality. Two polar strategies emerge as potentially optimal. The suppression policy would crush the curve by confining 90% of the population for 4 months to eradicate the virus. The flatten‐the‐curve policy would reduce the confinement to 30% of the population for 5 months, followed by almost 1 year of free circulation of the virus to attain herd immunity without overwhelming hospitals. Both strategies yield a total cost of around 15% of annual gross domestic product (GDP) when combining the economic cost of confinement with the value of lives lost. I show that hesitating between the two strategies can have a huge societal cost, in particular if the suppression policy is stopped too early. Because seniors are much more vulnerable, a simple recommendation emerges to shelter them as one deconfines young and middle‐aged people to build our collective herd immunity. By doing so, one reduces the death toll of the pandemic together with the economic cost of the confinement, and the total cost is divided by a factor 2. I also show that expanding the mass testing capacity to screen people sent back to work has a large benefit under various scenarios. This analysis is highly dependent upon deeply uncertain epidemiologic, sociological, economic, and ethical parameters. |
Author | Gollier, Christian |
Author_xml | – sequence: 1 givenname: Christian surname: Gollier fullname: Gollier, Christian email: christian.gollier@tse-fr.eu organization: University of Toulouse‐Capitole |
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SubjectTerms | Economic theory Economics and Finance GDP Gross Domestic Product Herd immunity Humanities and Social Sciences Pandemics |
Title | Cost–benefit analysis of age‐specific deconfinement strategies |
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