Economics vs. Epidemiology: Quantifying the Trade-Off

Wall Street Journal with the cold-hearted numbers. Conclusion: the lives saved are worth the economic pain, although, as always: can we do it cheaper?

«Federal regulators put the statistical value of a life at around $10 million.


In a March paper, Michael Greenstone and Vishan Nigam of the University of Chicago assign a lower value to older people and a higher one for the young. On that basis, they conclude that three months of social distancing could save 1.7 million lives worth $8 trillion.

So much for the benefit. What about the cost? Economists surveyed by The Wall Street Journal forecast annual GDP growth of 0.9% through 2022. That is down from a forecast of 1.9% in January, before social-distancing measures were adopted. I estimate that amounts to a loss of $3 trillion in today’s dollars. So in this accounting sense, the trade-off is worth it.»

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