The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19

Linda Thunström, Stephen Newbold (), David Finnoff, Madison Ashworth and Jason Shogren

Journal of Benefit-Cost Analysis, 2020, vol. 11, issue 2, 179-195

Abstract: We examine the net benefits of social distancing to slow the spread of COVID-19 in USA. Social distancing saves lives but imposes large costs on society due to reduced economic activity. We use epidemiological and economic forecasting to perform a rapid benefit–cost analysis of controlling the COVID-19 outbreak. Assuming that social distancing measures can substantially reduce contacts among individuals, we find net benefits of about $5.2 trillion in our benchmark case. We examine the magnitude of the critical parameters that might imply negative net benefits, including the value of statistical life and the discount rate. A key unknown factor is the speed of economic recovery with and without social distancing measures in place. A series of robustness checks also highlight the key role of the value of mortality risk reductions and discounting in the analysis and point to a need for effective economic stimulus when the outbreak has passed.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jbcoan:v:11:y:2020:i:2:p:179-195_2

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