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Senior Vice-President for Research and Innovation, Professor of Theoretical Physics, Michigan State University

Saturday, March 21, 2020

COVID-19: CBA, CFR, Open Borders


Some observations related to COVID-19.

1. Cost-Benefit Analysis: I don't favor this kind of purely economic analysis when human lives are at stake, but at the crudest level we are talking about US policy choices (i.e., lockdown vs permissive sweep) that could lead to of order a million more or fewer deaths. EPA sometimes values a human life at ~$7M, which suggests that the last 10-20 years of life for an older person could be valued at ~$1M. Under these assumptions the economic value of a lockdown which saves a million lives is in the trillion dollar range. This is similar to the cost of shutting down big chunks of the economy for months. So a CBA could go either way depending on detailed assumptions.

2. Open Borders: Many areas of the world are likely to develop into reservoirs for COVID-19. When the US emerges from lockdown it will be in our interests to carefully test (and potentially quarantine) everyone entering the country. I believe Singapore already has such a regime in place, with a reported 3 hour turn around for test results at the airport!

How can we possibly exit lockdown without the kind of control that Singapore exerts? In the COVID-19 reality it is crazy for the US not to impose strict control over the southern border. This will impact the presidential campaign in interesting ways. I don't think it will be tenable for a candidate to tell the virus-weary citizenry that it is impossible to control entry into the country. Once the infrastructure is built to effectively control our borders, it will be difficult to dismantle.

3. Case Fatality Rate: What is the lower bound on CFR (or more precisely, IFR = Infected Fatality Rate)? I have been working under the assumption that about 1% of infected individuals will die from COVID-19, assuming access to good medical care. (IIRC the value from S. Korea data is just below 1%.) I think there is a factor of 2-3 uncertainty in this number, so it could be as low as 0.5 or even 0.3%. Lower numbers are typically justified by invoking many asymptomatic, undetected cases in the population. However, large numbers of undetected infections also imply very rapid spread of the disease.

Rapid spread (e.g., in the absence of a rigorous lockdown) would lead to an overloaded medical system, with a resulting IFR which could be several times higher than the value that applies under good conditions -- so 0.3% could become 1%. In a scenario in which the virus sweeps through most of the population in a relatively short time (e.g., 3-6 months), an overall death rate of 1% times, e.g., 50-70% of the population is still a reasonable estimate. For the USA this would be at least 1.5 million people.

Related posts on COVID-19.

Hospitals in NYC already under stress: WSJ , NYT


Note Added: I've yet to see any detailed calculations for an alternative plan which tries to isolate the most vulnerable while allowing the economy to continue to function. Could it work?

1. Define the vulnerable population: e.g., people over 65 or with pre-existing conditions. Let's say this is 15% of the total population.

2. Try to isolate these people as much as possible. Give them free accommodation in the now empty hotels and college dormitories, on military bases and in makeshift shelters. Guarantee them free food delivery and regular medical checkups in these new locations. Within these locations practice very good internal isolation, as on the Princess cruise ship: isolate each person in their room, require the wearing of (inexpensive; not N95) masks when they emerge for activities, etc. Use the National Guard and military to execute the strategy.

Alternatively, we could leave the vulnerable population in place where they are now and move out any younger people (e.g., family members) they live with into temporary housing, or even confine the younger people in place if they consent to isolation in order to help their elders. The shelter in place order only applies to 65+ instead of the whole population!

It seems that this could be less expensive than the lockdown currently in place.

Uber and Lyft drivers wearing gloves and masks, spraying down their cars periodically, could be used as people movers or for food delivery. Instead of shutting down restaurants, the government could employ them to produce the meals for the sequestered people... The government just has to pay Uber and Lyft through their existing platform. Beats mailing checks to the entire population!

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