Living with Covid-19: balancing costs against benefits in the face of the virus

Publication date: 29 Jul 2020 | Publication type: National Institute Economic Review | External Author(s): Miles, D; Stedman, M; Heald, A | JEL Classification: I18; D61; E65 | Journal: National Institute Economic Review Issue 253 | Publisher: Cambridge University Press

This paper analyses the costs and benefits of lockdown policies in the face of COVID-19. What matters for people is the quality and length of lives and one should measure costs and benefits in terms of those things. That raises difficulties in measurement, particularly in valuing potential lives saved. We draw upon guidelines used in the UK for public health decisions, as well as other measures, which allow a comparison between health effects and other economic effects. We look at evidence on the effectiveness of past severe restrictions applied in European countries, focusing on the evidence from the UK. The paper considers policy options for the degree to which restrictions are eased. There is a need to normalise how we view COVID because its costs and risks are comparable to other health problems (such as cancer, heart problems, diabetes) where governments have made resource decisions for decades. The lockdown is a public health policy and we have valued its impact using the tools that guide health care decisions in the UK public health system. The evidence suggests that the costs of continuing severe restrictions in the UK are large relative to likely benefits so that a substantial easing in general restrictions in favour of more targeted measures is warranted. 

Keyword tags: 
value of lives saved
cost benefit analysis
COVID-19