Economists at the University of Wyoming estimated the economic benefits from lives saved by efforts to “flatten the curve” outweighed the projected massive hit to the nation’s economy by a staggering $5.2 trillion. Another study by two University of Chicago economists estimated the savings from social distancing could be so huge, “it is difficult to think of any intervention with such large potential benefits to American citizens.”
In other words, the economists are saying, “the cure” doesn’t come at a cost at all when factoring in the economic value of the lives saved.
The article goes on to discuss “Value of a Statistical Life” and other obscure topics we can ignore.
The studies referred to are (Wyoming) “The benefits and costs of using social distancing to flatten the curve for COVID-19” by Thunstrom and others, to appear in the Journal of Benefit-Cost Analysis, and (Chicago) “Does Social Distancing Matter?” by Greenstone and somebody else, a preprint at the Becker Friedman Institute.
The Chicago paper came out in March 2020. Here’s the pertinent part of the Abstract (my emphasis):
This paper develops and implements a method to monetize the impact of moderate social distancing on deaths from COVID-19. Using the Ferguson et al. (2020) simulation model of COVID-19’s spread and mortality impacts in the United States, we project that 3-4 months of moderate distancing beginning in late March 2020 would save 1.7 million lives by October 1. Of the lives saved, 630,000 are due to avoided overwhelming of hospital intensive care units. Using the projected age-specific reductions in death and age-varying estimates of the United States Government’s value of a statistical life, we find that the mortality benefits of social distancing are about $8 trillion or $60,000 per US household.
This is hilariously wrong. The Ferguson model was long ago busted. It predicted, as the Abstract said, a “savings” of 1.7 million lives. Somehow, if we roamed the streets free, the coronavirus was going to be worse that the Spanish flu. It is a bad model, a buggy model, a dumb model.
What we have here is not uncommon in academia: models of models. This is only two levels deep, but in theory (!) you can stack these one upon another until you reach…tenure. Or a big grant, which contains juicy overhead for your Dean.
How many times have I told you that models, all models, only say what they’re told to say?
This isn’t rhetorical. Answer the question.
These Chicago people told a model to say every life saved by lockdowns was worth this-and-such, and a second model was told to say this many lives will be saved. The joint model, then, was told to say 8 trillion! would be gained by locking down.
Does it seem to you the economy is 8 trillion! richer, now that we’re coming to the end of the lockdowns? Or does it seem instead that the gibbering panic cost money, not gained it?
The Wyoming paper was even bolder. It did all its own modeling. I might have miscounted, but it looks like that gained the US 5.2 trillion! with four equations. Here they are (with no attempt to make pretty or explain):
This is at least a clear example of a model saying exactly what it was told to say. Here in those equations (if I didn’t miss any) are what it was told to say.
It said 5.2 trillion!
And the reporter at the Washington Post, following his own or his editor’s model, only said what he was supposed to say.
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