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The Individual Welfare Costs of Stay-at-Home Policies

Author

Listed:
  • Andersson, Ola

    (Department of Economics, Uppsala University)

  • Campos-Mercade, Pol

    (Copenhagen University)

  • Carlsson, Fredrik

    (University of Gothenburg)

  • Schneider, Florian

    (University of Zurich)

  • Wengström, Erik

    (Lund University)

Abstract

This paper reports the results of a choice experiment designed to estimate the private welfare costs of stay-at-home policies during the COVID-19 pandemic. The study is conducted on a large and representative sample of the Swedish population. The results suggest that the welfare cost of a one-month stay-at-home policy, restricting non-working hours away from home, amounts to 9.1 percent of Sweden's monthly GDP. The cost can be interpreted as 29,600 quality-adjusted life years (QALYs), which roughly corresponds to between 3,700 and 8,000 COVID-19 fatalities. Moreover, we find that stricter and longer lockdowns are disproportionately more costly than more lenient ones. This result indicates that strict stay-at-home policies are likely to be cost-effective only if they slow the spread of the disease much more than more lenient ones.

Suggested Citation

  • Andersson, Ola & Campos-Mercade, Pol & Carlsson, Fredrik & Schneider, Florian & Wengström, Erik, 2020. "The Individual Welfare Costs of Stay-at-Home Policies," Working Paper Series 1340, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1340
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    Cited by:

    1. Hakan Yilmazkuday, 2021. "Welfare costs of COVID‐19: Evidence from US counties," Journal of Regional Science, Wiley Blackwell, vol. 61(4), pages 826-848, September.
    2. Andersson, Ola & Campos-Mercade, Pol & Meier, Armando N. & Wengström, Erik, 2020. "Anticipation of COVID-19 Vaccines Reduces Social Distancing," Working Papers 2020:29, Lund University, Department of Economics.
    3. Hakan Yilmazkuday, 2021. "Welfare Costs of Travel Reductions within the U.S. due to COVID-19," Working Papers 2114, Florida International University, Department of Economics.
    4. Miguel Casares & Paul Gomme & Hashmat Khan, 2022. "COVID‐19 pandemic and economic scenarios for Ontario," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 503-539, February.

    More about this item

    Keywords

    tay-at-home orders; welfare effects; choice experiment;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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