Apr 23, 2020 12:06:00

Researchers argue that calculating the economic damage of measures to keep social distance and the cost effectiveness of saved lives will be about 560 trillion yen

In order to limit the damage of the new coronavirus infectious disease (COVID-19) as much as possible, each country has adopted policies to refrain from going out unnecessarily and forced enforcement of city blockades. There are criticisms that the damage to the social distance is 'too much damage to the economy', and

protest demonstrations against urban blockades are being held in various places in the United States . However, according to a new analysis conducted by an American research team, 'Calculating the cost-effectiveness of the economic damage due to social distance and the value of saved lives will be about 560 trillion yen in profit.' The result was shown.

The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19 by Linda Thunstrom, Stephen Newbold, David Finnoff, Madison Ashworth, Jason F. Shogren :: SSRN
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561934

The value of lives saved by social distancing outweighs the costs | Ars Technica
https://arstechnica.com/science/2020/04/the-value-of-lives-saved-by-social-distancing-outweighs-the-costs/

It is important to maintain a social distance to prevent virus infection, but it has been pointed out that the social distance makes it impossible to carry out conventional economic activities and seriously damages the economy. `` Workers and businesses face catastrophic situations in both developed and developing countries, '' said

International Labor Organization (ILO) Executive Secretary Guy Ryder, with 2,500 unemployed worldwide at the end of 2020. Reportedly likely to significantly exceed the number of people .

So the research team at the University of Wyoming conducted an analysis in which a social distance strategy was used to convert the 'value of life saved' into a monetary amount and compare it with the loss due to the city blockade. It may not feel good to price people's lives, but in reality society spends a lot of money to protect people's lives, and society gives people's lives a very high value. It is clear that there is.

The United States Federal Government needs to give a 'value of life' in establishing a policy about what might kill a person, such as a car. In high-risk workplaces, the total salary will increase by 10 million dollars (about 1.1 billion yen) as the number of deaths per 10,000 workers increases, and the federal government agency `` statistical life value '' 1 It is estimated to be $ 10 million per person and is reflected in various policies. The research team used the value of life of '$ 10 million per person' to compare the loss due to social distance.

No matter how much a pandemic keeps you socially connected, you can't completely eliminate interpersonal contact. The research team envisions a scenario in which human contact is reduced by 38% from the past due to people's social distance, and from a number of benchmarks, 'By maintaining social distance, 1.24 million people in the United States as a whole Life is saved. ' If the value of statistical life is $ 10 million, saving 1.24 million lives would save $ 1.24 trillion.

The team then went on to calculate the damage to the economy due to social distances.

Goldman Sachs said , 'By taking social distances, 2020 annual GDP in the United States will be minus 6.2%. We calculated based on the prediction that 'it will be depressed.' In this case, the annual loss caused by taking a social distance will be $ 1.37 trillion (about 1470 trillion yen).

In addition, the research team also calculated 'the loss of overcoming a pandemic without taking social distance as a countermeasure against COVID-19'. Under the circumstances of a COVID-19 pandemic, many people will die or be hospitalized if they are not socially separated, and in some cases medical disruption will occur, affecting the treatment of other diseases and trauma. Therefore, the damage to the economy is not zero. Many researchers have calculated that if you face a COVID-19 pandemic with no-guard tactics, you will lose 1.5% to 8.4% of your annual GDP, but the research team says it's a little smaller, '2% loss'. I calculated. In this case, the annual economic loss will be 6,490 billion dollars (about 700 trillion yen).

Based on the above calculation, first, 'economic loss when social distance is taken ($ 1.37 trillion)' to 'economic loss when social distance is not taken ($ 6,490 billion)' Substantial loss due to social distance is calculated to be 7,210 billion dollars (about 770 trillion yen). Next, after subtracting the loss to society ($ 7.21 trillion) from the value of lives saved by taking social distance ($ 1.2 trillion), the research team said, `` By taking social distance , The total profit will be 5,160 billion dollars (about 560 trillion yen). '

Of course, the research team acknowledges that the COVID-19 pandemic is a work in progress and the numbers used in this calculation are constantly changing. In the worst case, where social distance is not maintained, it is estimated that the number of deaths in the United States will reach nearly 2.2 million , and the true economic impact is still unclear.

According to an analysis conducted based on the case of the Spanish cold that was prevalent in 1918, 'If you actively try to limit the activities of society and citizens, the economic growth after deregulation will increase.' it was done. From this result, as the pandemic itself causes serious damage to the economy, measures against the pandemic and the economy are not simple trade-offs, and efforts to actively suppress the pandemic result in favorable economic results. It may have an impact.

Studies show that the stronger the pandemic measures, the stronger the economy can recover, and the plague measures and the economy are not a trade-off-GIGAZINE