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Economic Benefits of COVID-19 Screening Tests

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Abstract

We assess the economic value of screening testing programs as a policy response to the ongoing COVID-19 pandemic. We find that the fiscal, macroeconomic, and health benefits of rapid SARS-CoV-2 screening testing programs far exceed their costs, with the ratio of economic benefits to costs typically in the range of 2-15 (depending on program details), not counting the monetized value of lives saved. Unless the screening test is highly specific, however, the signal value of the screening test alone is low, leading to concerns about adherence. Confirmatory testing increases the net economic benefits of screening tests by reducing the number of healthy workers in quarantine and by increasing adherence to quarantine measures. The analysis is undertaken using a behavioral SIR model for the United States with 5 age groups, 66 economic sectors, screening and diagnostic testing, and partial adherence to instructions to quarantine or to isolate.

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  • Andrew Atkeson & Michael Droste & Michael J. Mina & James H. Stock, 2020. "Economic Benefits of COVID-19 Screening Tests," Staff Report 616, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:89012
    DOI: 10.21034/sr.616
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    1. Simon Mongey & Laura Pilossoph & Alexander Weinberg, 2021. "Which workers bear the burden of social distancing?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 509-526, September.
    2. Facundo Piguillem & Liyan Shi, 2022. "Optimal Covid-19 Quarantine and Testing Policies," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2534-2562.
    3. Luiz Brotherhood & Philipp Kircher & Cezar Santos & Michèle Tertilt, 2020. "An Economic Model of the Covid-19 Epidemic: The Importance of Testing and Age-Specific Policies," CESifo Working Paper Series 8316, CESifo.
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    5. Ned Augenblick & Jonathan T. Kolstad & Ziad Obermeyer & Ao Wang, 2020. "Group Testing in a Pandemic: The Role of Frequent Testing, Correlated Risk, and Machine Learning," NBER Working Papers 27457, National Bureau of Economic Research, Inc.
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    8. David Berger & Kyle Herkenhoff & Chengdai Huang & Simon Mongey, 2022. "Testing and Reopening in an SEIR Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 43, pages 1-21, January.
    9. Goolsbee, Austan & Syverson, Chad, 2021. "Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020," Journal of Public Economics, Elsevier, vol. 193(C).
    10. Daron Acemoglu & Ali Makhdoumi & Azarakhsh Malekian & Asuman Ozdaglar, 2020. "Testing, Voluntary Social Distancing and the Spread of an Infection," NBER Working Papers 27483, National Bureau of Economic Research, Inc.
    11. Reda Cherif & Fuad Hasanov, 2020. "A TIP Against the COVID-19 Pandemic," IMF Working Papers 2020/114, International Monetary Fund.
    12. Brotherhood, Luiz & Kircher, Philipp & Santos, Cezar & Tertilt, Michèle, 2020. "An economic model of the Covid-19 epidemic: The importance of testing and age-specific policies," CEPR Discussion Papers 14695, C.E.P.R. Discussion Papers.
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    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Health > Testing

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    Cited by:

    1. Steven Stillman & Mirco Tonin, 2022. "Communities and testing for COVID-19," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(4), pages 617-625, June.
    2. Ricardo Martínez & Juan D Moreno Ternero, 2021. "Pandemic performance," ThE Papers 21/09, Department of Economic Theory and Economic History of the University of Granada..
    3. Martínez, Ricardo & Moreno-Ternero, Juan D., 2022. "An axiomatic approach towards pandemic performance indicators," Economic Modelling, Elsevier, vol. 116(C).
    4. Shami, Labib & Lazebnik, Teddy, 2022. "Economic aspects of the detection of new strains in a multi-strain epidemiological–mathematical model," Chaos, Solitons & Fractals, Elsevier, vol. 165(P2).
    5. Ely, Jeffrey & Galeotti, Andrea & Jann, Ole & Steiner, Jakub, 2021. "Optimal test allocation," Journal of Economic Theory, Elsevier, vol. 193(C).
    6. Fallucchi, Francesco & Görges, Luise & Machado, Joël & Pieters, Arne & Suhrcke, Marc, 2021. "How to make universal, voluntary testing for COVID-19 work? A behavioural economics perspective," Health Policy, Elsevier, vol. 125(8), pages 972-980.
    7. Francesco Furno, 2020. "The Testing Multiplier: Fear vs Containment," Papers 2012.03834, arXiv.org.
    8. James Broughel & Michael Kotrous, 2021. "The benefits of coronavirus suppression: A cost-benefit analysis of the response to the first wave of COVID-19 in the United States," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-20, June.
    9. Xin, Meiqi & Lau, Joseph Tak-fai & Lau, Mason M.C., 2022. "Multi-dimensional factors related to participation in a population-wide mass COVID-19 testing program among Hong Kong adults: A population-based randomized survey," Social Science & Medicine, Elsevier, vol. 294(C).
    10. Hasnan Baber, 2021. "Efficacy of COVID-19 screening system and customer satisfaction in banks: moderating role of the perceived threat and health risk," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 26(4), pages 295-304, December.
    11. Martin Kahanec & Lukáš Lafférs & Bernhard Schmidpeter, 2021. "The impact of repeated mass antigen testing for COVID-19 on the prevalence of the disease," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(4), pages 1105-1140, October.
    12. Soltanisehat, Leili & González, Andrés D. & Barker, Kash, 2023. "Modeling social, economic, and health perspectives for optimal pandemic policy decision-making," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).

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    More about this item

    Keywords

    Epidemiological models; Macroeconomics; Antigen testing; COVID-19;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • I0 - Health, Education, and Welfare - - General

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