IDEAS home Printed from https://ideas.repec.org/a/wly/soecon/v87y2021i4p1064-1089.html
   My bibliography  Save this article

Economic lessons for COVID‐19 pandemic policies

Author

Listed:
  • W. Kip Viscusi

Abstract

The COVID‐19 pandemic poses novel health issues. However, the benefits and costs of the pandemic and policies to address it have a familiar economic structure. Chief among the health‐related benefits are the monetized values of the U.S. mortality costs of $3.9 trillion in 2020. The combined U.S. mortality and morbidity costs are $5.5–5.9 trillion. Global mortality costs in 2020 total $10.1 trillion. The skewed age distribution of COVID‐19 illnesses has stimulated increased advocacy of downward adjustments in the value of a statistical life (VSL) for older people. This article examines the role of age for policy analysis generally and for the rationing of scarce medical treatments, such as ventilators. Mortality risk reduction benefits should be based on the reduced probability of death multiplied by the pertinent VSL. Effective communication of risks to foster precautions hinges on the credibility of the information source, which public officials have jeopardized. Efficient control of risks imposes limits on personal freedoms to foster health improvements.

Suggested Citation

  • W. Kip Viscusi, 2021. "Economic lessons for COVID‐19 pandemic policies," Southern Economic Journal, John Wiley & Sons, vol. 87(4), pages 1064-1089, April.
    • Handle: RePEc:wly:soecon:v:87:y:2021:i:4:p:1064-1089
    DOI: 10.1002/soej.12492
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/soej.12492
    Download Restriction: no
    File URL: https://libkey.io/10.1002/soej.12492?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    2. Viscusi, W Kip, 1997. "Alarmist Decisions with Divergent Risk Information," Economic Journal, Royal Economic Society, vol. 107(445), pages 1657-1670, November.
    3. Adler, Matthew, 2020. "What should we spend to save lives in a pandemic? A critique of the value of statistical life," LSE Research Online Documents on Economics 105283, London School of Economics and Political Science, LSE Library.
    4. W. Kip Viscusi, 1994. "Mortality Effects of Regulatory Costs and Policy Evaluation Criteria," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 94-109, Spring.
    5. Viscusi, W. Kip & Masterman, Clayton J., 2017. "Income Elasticities and Global Values of a Statistical Life," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 8(2), pages 226-250, July.
    6. W. Kip Viscusi & Richard J. Zeckhauser, 2005. "Recollection Bias and the Combat of Terrorism," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 27-55, January.
    7. W. Kip Viscusi, 2020. "Pricing the global health risks of the COVID-19 pandemic," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 101-128, October.
    8. Masterman, Clayton J. & Viscusi, W. Kip, 2018. "The Income Elasticity of Global Values of a Statistical Life: Stated Preference Evidence," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 9(3), pages 407-434, October.
    9. O'Conor, Richard M. & Blomquist, Glenn C., 1997. "Measurement of consumer-patient preferences using a hybrid contingent valuation method," Journal of Health Economics, Elsevier, vol. 16(6), pages 667-683, December.
    10. James Broughel & W. Kip Viscusi, 2021. "The Mortality Cost Of Expenditures," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 156-167, January.
    11. Blomquist, Glenn C. & Dickie, Mark & O'Conor, Richard M., 2011. "Willingness to pay for improving fatality risks and asthma symptoms: Values for children and adults of all ages," Resource and Energy Economics, Elsevier, vol. 33(2), pages 410-425, May.
    12. Gentry, Elissa Philip & Viscusi, W. Kip, 2016. "The fatality and morbidity components of the value of statistical life," Journal of Health Economics, Elsevier, vol. 46(C), pages 90-99.
    13. Kip Viscusi, W. & Magat, Wesley A. & Huber, Joel, 1991. "Pricing environmental health risks: survey assessments of risk-risk and risk-dollar trade-offs for chronic bronchitis," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 32-51, July.
    14. Thunström, Linda & Newbold, Stephen C. & Finnoff, David & Ashworth, Madison & Shogren, Jason F., 2020. "The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 11(2), pages 179-195, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Carlin & Brian E. Dixon & Kosali I. Simon & Ryan Sullivan & Coady Wing, 2022. "How Undervalued is the Covid-19 Vaccine? Evidence from Discrete Choice Experiments and VSL Benchmarks," NBER Working Papers 30118, National Bureau of Economic Research, Inc.
    2. Mark Pingle, 2022. "Addressing threats like Covid: why we will tend to over-react and how we can do better," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 21(1), pages 9-23, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    2. W. Kip Viscusi, 2020. "Pricing the global health risks of the COVID-19 pandemic," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 101-128, October.
    3. Thomas J. Kniesner & Ryan Sullivan, 2020. "The forgotten numbers: A closer look at COVID-19 non-fatal valuations," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 155-176, October.
    4. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    5. Patrick Carlin & Brian E. Dixon & Kosali I. Simon & Ryan Sullivan & Coady Wing, 2022. "How Undervalued is the Covid-19 Vaccine? Evidence from Discrete Choice Experiments and VSL Benchmarks," NBER Working Papers 30118, National Bureau of Economic Research, Inc.
    6. Cameron, Trudy Ann & DeShazo, J.R., 2013. "Demand for health risk reductions," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 87-109.
    7. Brad R. Humphreys & Gary A. Wagner & John C. Whitehead & Pamela Wicker, "undated". "Willingness to pay for COVID-19 environmental health risk reductions in consumption: Evidence from U.S. professional sports," Working Papers 21-05, Department of Economics, Appalachian State University.
    8. Euijune Kim & Dongyeong Jin & Hojune Lee & Min Jiang, 2023. "The economic damage of COVID-19 on regional economies: an application of a spatial computable general equilibrium model to South Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(1), pages 243-268, August.
    9. Georges Dionne & Paul Lanoie, 2002. "How to Make a Public Choice About the Value of a Statistical Life: The Case of Road Safety," Cahiers de recherche 02-04, HEC Montréal, Institut d'économie appliquée.
    10. Zubova, E., 2022. "Value of statistical life in Russia based on microdata," Journal of the New Economic Association, New Economic Association, vol. 53(1), pages 163-179.
    11. Conti, G.; & Giustinelli, P.;, 2022. "For Better or Worse? Subjective Expectations and Cost-Benefit Trade-Offs in Health Behavior: An Application to Lockdown Compliance in the United Kingdom," Health, Econometrics and Data Group (HEDG) Working Papers 22/14, HEDG, c/o Department of Economics, University of York.
    12. Yoshiro Tsutsui & Iku Tsutsui-Kimura, 2022. "How does risk preference change under the stress of COVID-19? Evidence from Japan," Journal of Risk and Uncertainty, Springer, vol. 64(2), pages 191-212, April.
    13. James K. Hammitt & Peter Morfeld & Jouni T. Tuomisto & Thomas C. Erren, 2020. "Premature Deaths, Statistical Lives, and Years of Life Lost: Identification, Quantification, and Valuation of Mortality Risks," Risk Analysis, John Wiley & Sons, vol. 40(4), pages 674-695, April.
    14. Marcela V. Parada‐Contzen, 2019. "The Value of a Statistical Life for Risk‐Averse and Risk‐Seeking Individuals," Risk Analysis, John Wiley & Sons, vol. 39(11), pages 2369-2390, November.
    15. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for timing when assessing health-related policies," LSE Research Online Documents on Economics 100038, London School of Economics and Political Science, LSE Library.
    16. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May.
    17. Anna Alberini, 2017. "Measuring the economic value of the effects of chemicals on ecological systems and human health," OECD Environment Working Papers 116, OECD Publishing.
    18. Broughel, James & Viscusi, Kip, 2017. "Death by Regulation: How Regulations Can Increase Mortality Risk," Working Papers 06864, George Mason University, Mercatus Center.
    19. Hammitt, James K. & Tuncel, Tuba, 2023. "Monetary values of increasing life expectancy: sensitivity to shifts of the survival curve," TSE Working Papers 23-1416, Toulouse School of Economics (TSE).
    20. Shah Rome Khan & Muhammad Imran Khan & Dr. Sardar Javaid Iqbal Khan, 2023. "An Investigation into the Statistical Significance of Labor Force Longevity in Brick Kilns and Marble Industry: A Case Study of Peshawar," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 679-688.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:soecon:v:87:y:2021:i:4:p:1064-1089. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2325-8012 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.