The lifesaving benefits of strict physical distancing rules during the coronavirus pandemic far outweigh their projected harm to the US economy, a new report claims.
"Our benefit-cost analysis shows that the extensive physical distancing measures being adopted in the US likely do not constitute an overreaction," said lead author Linda Thunstrom, an assistant professor of economics at the University of Wyoming in Laramie.
"Physical distancing saves lives but comes at large costs to society due to reduced economic activity," she said in a university news release. "Still, based on our benchmark assumptions, the economic benefits of lives saved substantially outweigh the value of the projected losses to the US economy."
Assuming that physical distancing measures are adopted widely enough to reduce contact between people significantly, their benefits will surpass the economic costs by $5.2 trillion (R99 trillion), according to Thunstrom and colleagues.
A rapid assessment
The findings – published online in the Journal of Benefit-Cost Analysis – are based on the most recent data on coronavirus spread and its impact on economic activity.
Study co-author Stephen Newbold said, "It should be possible to conduct a more detailed analysis after more data are available." Newbold is an assistant professor of economics.
"But a rapid assessment, based on the best currently available information, adds much-needed rigour to the public discussion about the policy response to this outbreak," he explained in the news release.
The analysis includes the potential impact of Covid-19 on the US healthcare system. The Wyoming researchers estimated that current physical distancing measures will reduce the average contact rate among individuals by 38%. And that, in turn, will reduce the peak of the infection curve by more than half, helping avoid overwhelming the healthcare system and keeping the death rate below worst-case scenarios.
The analysis didn't assess how physical distancing will affect specific groups of people.
"It stands to reason that the most vulnerable groups in society will be the hardest hit. For example, the service industry will be disproportionately affected by these policies, which will lead to mass layoffs of low-income workers," the researchers wrote.
It is also likely that the most economically disadvantaged groups will suffer the worst health consequences from Covid-19, the study authors said.
Painful costs and consequences
In theory, the researchers said, the uneven impact of the pandemic and physical distancing measures could be addressed "with appropriate redistributions of resources."
The researchers also said the United States needs to better prepare for future disease outbreaks.
"Our analysis suggests that the aggressive physical distancing policies currently promoted in the US probably are justified, given that no good contingency plans were in place for an epidemic of this magnitude," they wrote. "But the costs and consequences will be painful. To avoid these in the future, there are likely large social benefits to ensuring that we are better prepared for the next pandemic."
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