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Trading Off Consumption and COVID-19 Deaths

Author

Listed:
  • Robert E. Hall
  • Charles I. Jones
  • Peter J. Klenow

Abstract

This note develops a framework for thinking about the following question: What is the maximum amount of consumption that a utilitarian welfare function would be willing to trade off to avoid the deaths associated with COVID-19? The answer depends crucially on the mortality rate associated with the coronavirus. If the mortality rate averages 0.81%, as projected in one prominent study, our answer is 41% of one year's consumption. If the mortality rate instead averages 0.44% across age groups, as suggested by a recent seroprevalence study, our answer is 28%.

Suggested Citation

  • Robert E. Hall & Charles I. Jones & Peter J. Klenow, 2020. "Trading Off Consumption and COVID-19 Deaths," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 42(1), pages 1-14, June.
    • Handle: RePEc:fip:fedmqr:88339
    DOI: 10.21034/qr.4211
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; coronavirus;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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