Americans May Be Willing To Pay $5 Trillion To Stop The Spread Of The Coronavirus And Save Lives

Americans may be willing to pay $5 trillion to stop the spread of the coronavirus and save lives

The big idea

A new analysis suggests Americans are willing to pay about US$5 trillion to stop the spread of COVID-19 and save as many lives as possible – dwarfing the $3 trillion Congress has so far agreed to spend to support the U.S. economy and its workers. To get to that figure, we calculated the implicit value of public intervention measures like social distancing and statewide lockdowns – meant to prevent people from catching COVID-19 and possibly dying – by estimating how much people are willing to pay to have them implemented.

We conclude – based on modeling the spread of the disease and examining epidemiological and economic data – that the average person is essentially willing to pay $15,000 to reduce the rates of infection through social distancing, shelter-in-place and other interventions. We then multiplied that by the population of the U.S. to get an aggregate figure.

Why it matters

Health officials tend to argue that strong social distancing measures should remain in place for a prolonged period of time, while others want the restrictions lifted immediately. Economists frequently calculate what people are willing to pay to find an answer to questions like these. The U.S. Department of Transportation, for example, uses an estimate of $28,800 per injury avoided for minor injuries and $9.6 million per life saved for interventions that reduce fatality risks – such as building a new highway or adding a train line.

Clearly, it would not be reasonable to wait to ease the restrictions until the fatality rate of COVID-19 falls to zero. We accept deaths arising from the seasonal flu and deaths that could be avoided by allocating more resources to medical research, and we readily accept potentially deadly hazards in our daily activities, like when we get in a car. The key is to find the right balance, as we often do with other risks, ensuring that the costs of the measures adopted do not exceed the benefits.

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