COVID-19 Benefit Cost Analysis
Resources for Benefit-Cost Analyses to Inform COVID-19 Policymaking
October 15, 2020 update
This resource page is intended to help analysts and decision makers keep up with the rapidly growing policy analysis literature about interventions to address the COVID-19 pandemic. Studies seem to be forthcoming at a rate that almost approaches the speed at which the virus is spreading. As a service to the field, we are listing those studies that have come to our attention. We also look to readers to let us know if there are additional studies we should include.
At this stage in the pandemic, policy analyses will be inherently preliminary and reflect a higher level of imprecision than analyses of diseases and interventions where we have more history. But, each generation of studies can learn from and build on those that went before. So, we are listing virtually all the studies we find while recognizing that the specific policy comparisons being made and the underlying assumptions and estimates used must be considered somewhat tentative.
The Society expresses its thanks to all the analysts who have made early contributions to this literature. Part of being relevant is being timely, even when a lot of important information is missing or must be approximates. We look forward to seeing these early studies give rise to more thorough analyses.
We have listed studies in two categories. The first contains methodological studies from the Journal of Benefit-Cost Analysis that can guide efforts to assess policy responses to COVID-19. The second is the list of specific COVID-19 policy studies we have found that use benefit-cost analysis. If you know of something that should be added, please send a citation to email@example.com.
Relevant Methodological Material:
- Behavioral Economics and the Conduct of Benefit-Cost Analysis: Towards Principles and Standards, by Lisa A. Robinson and James K. Hammitt, Journal of Benefit-Cost Analysis, 2011; Volume 2, Issue 2, pp 1-51.
- Towards Principles and Standards for the Benefit-Cost Analysis of Safety, by Scott Farrow and W. Kip Viscusi, Journal of Benefit-Cost Analysis, Volume 2, Issue 3, 2011, Article 5
- Skills of the trade: valuing health risk reductions in benefit-cost analysis, by Lisa A. Robinson and James K. Hammitt, Journal of Benefit-Cost Analysis, 2013; 4(1): 107130
- Some Pitfalls of Practical Benefit-Cost Analysis, by Clark Nardinelli, Journal of Benefit-Cost Analysis, 2018; 9(3):519530.
- Dynamic Benefit-Cost Analysis for Uncertain Futures, by Susan E. Dudley, Daniel R. Pérez , Brian F. Mannix and Christopher Carrigan, Journal of Benefit-Cost Analysis, 2019; 10(2):206225.
How Much is A Human Life Worth?
While the Benefit-Cost Analysis field cannot answer this specific question, it can provide considerable guidance to decision makers who must weigh alternative ways of reducing the risk of death. The key concept here is the Value of a Statistical Life which indicates how much money people will pay to reduce their chance of dying or how much extra pay they demand to take on a job with a higher risk of death.
The policy debates over how to respond to COVID-19 have seen an explosion of interest in this concept. Here are three great resources to help get you up to speed:
- Valuing Mortality Risk in the Time of COVID-19 by James K. Hammitt, June 2020. This paper examines whether the value per statistical life (VSL) for the United States, estimated as approximately $10 million, is too large. It lists several reasons for thinking so. First, VSL is a marginal rate of substitution and the potential risk reductions are non-marginal. The standard VSL model implies the rate of substitution of wealth for risk reduction decreases sharply once the value of risk reduction accounts for a substantial share of income. Second, mortality risk is concentrated among the elderly, for whom VSL may be smaller and who would benefit from a persistent risk reduction for a shorter period because of their shorter life expectancy. Third, the pandemic and responses to it have caused substantial losses in income that should decrease VSL. In contrast, VSL is plausibly larger for risks (like COVID-19) that are dreaded, uncertain, catastrophic, and ambiguous.
- Assessing Ways of Saving Lives During the COVID-19 Pandemic: A conversation with Kip Viscusi Kip Viscusi, June 30, 2020 This Society for Benefit-Cost Analysis webinar features an interview between two experts in the field of valuing mortality risk reductions, Kip Viscusi and Tom Kniesner.
- Valuing COVID Mortality Risks, by Center for Health Decision Science, March 28, 2020
- Resource Pack: Valuing Health and Longevity in BCA by Center for Health Decision Science, 2020
- by Adam Rogers. This well-written article in Wired give a nice history of the concept of the value of a statistical life and how that concept has been used in policy making. It then looks at how this value can inform the debate over responses to the COVID-19 pandemic.
- Do the Benefits of COVID-19 Policies Exceed the Costs? Exploring Uncertainties in the Age-VSL Relationship by Lisa Robinson, Ryan Sullivan, Jason F. Shogren, July 16, 2020. This article compares the effects of three approaches often used to adjust the value of a statistical life (VSL) for age: an invariant population-average VSL; a constant value per statistical life-year (VSLY); and a VSL that follows an inverse-U pattern, peaking in middle age. The authors find that when applied to the U.S. age distribution of COVID-19 deaths, these approaches result in average VSL estimates of $10.6 million, $4.5 million, and $8.5 million. The differences in these values is substantial enough to alter the conclusions of frequently cited analyses of social distancing.
- COVID-19 and uncertainties in the value per statistical life. , by Lisa Robinson, August 5, 2020. This short article nicely summarizes key uncertainties in measures of the value of statistical life.
Benefit-Cost Studies of COVID-19 Policy Options
General COVID-19 Resources
- The SSRN maintains a page highlighting the array of work published in its network on COVID-19.
- The Johns Hopkins Universitys COVID-19 Dashboard provides very useful and widely circulated counts of the number of COVID-19 cases, deaths, and recoveries around the world
- The New England Journal of Medicine is making all of its articles related to COVID-19 available for free through its website.
- The Journal of the American Medical Association also has a website with articles that summarize COVID-19 related medical care
- How the Virus Got Out, by Jin Wu, Weiyi Cai, Derek Watkins and James GlanzMarch 22, 2020. The New York Times provides a great graphic showing how international travel patterns spread the virus across the world. (Note: this graphic has a lot of data any may take a while to load on your computer.)
- What Policymakers Can Do to Defeat COVID-19, by Vivian Ho and Heidi Russell, blog of Rice Universitys Baker Institute for Public Policy, April 13, 2020. This widely circulated blog, which includes lots of links to other sources, lists a number of treatment and policy options for addressing the pandemic.
- Policy Implications of Models of the Spread of Coronavirus: Perspectives and Opportunities for Economists, by Christopher Avery, William Bossert, Adam Clark Glenn Ellison, Sara Fisher Ellison, NBER Working Paper 27007, April 2020.This paper provides a critical review of models of the spread of the coronavirus (SARS-CoV-2) epidemic that have been influential in recent policy decisions. There is tremendous opportunity for social scientists to advance the relevant literature as new and better data becomes available to bolster economic outcomes and save lives
- NBER Papers on Health Economics.Not surprisingly, researchers in the National Bureau of Economic Research have produces a flood of papers on topics related to COVID-19 policies. In addition to the NBER papers listed elsewhere, here is a selected list of relevant papers as of April 20:
- Estimating the COVID-19 Infection Rate: Anatomy of an Inference Problem by Charles Manski and Francesca Molinari w27023
- The Subways Seeded the Massive Coronavirus Epidemic in New York City, by Jeffrey Harris w27021
- Lock-downs Loneliness and Life Satisfaction, by Daniel Hamermesh w27018
- How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey, by Alexander Bartik, Marianne Bertrand, Zoë B. Cullen, Edward Glaeser, Michael Luca, and Christopher Stanton w26989
Covid Impact Survey
The Data Foundation is releasing data collected in the COVID Impact Survey. The survey is an effort to provide national and regional statistics about physical health, mental health, economic security, and social dynamics in the United States during the coronavirus pandemic.
The results released provide reliable estimates at the national level as well as for 10 states and 8 metropolitan areas, including for California, Colorado, Florida, Louisiana, Minnesota, Missouri, Montana, New York, Oregon, Texas, Atlanta, Baltimore, Birmingham, Chicago, Cleveland, Columbus, Phoenix, and Pittsburgh.
Key findings include:
The COVID Impact Survey is unique in that its methodological approach relies on an address-based random sample and also includes a range of questions about physical health, mental health, and economic security on a single survey.
The survey was administered by NORC at the University of Chicago and the project is supported by the David and Lucile Packard Foundation, Alfred P. Sloan Foundation, and the Federal Reserve Bank of Minneapolis. Additional details about the COVID Impact Survey, including a complete de-identified, open dataset are available at www.covid-impact.org for ongoing research and analysis.