Calculating the benefits of lockdowns

Context: Lockdowns need to be guided by trade-offs between harsh and mild policies.

Benefit of lockdowns 

• Prevent the spread of disease and thus, achieve the fall in mortality.
• As there is high inequality in vaccination (Only 1% of total vaccination in low-income countries), lockdowns are the only defence against the virus in many parts of the world.

Cost of lockdowns 

• Loss of livelihood and GDP: France and Italy imposed heavy lockdowns and suffered 3% shrinkage in GDP and thereby, fall in the quality of life.
• Worse impact in poorer countries: For every infected person cured in poorer countries, 1.76 children die on account of a fall in the quality of life.
• Other costs: Horrors faced by the migrant crisis in India, lost schooling and a potential rise in child labour.
• Post lockdown management: Disease spread and mortality rise once lockdowns are withdrawn.

Assessing the cost of life

• Measuring the cost of life as the value of lost GDP: Saving life by imposing heavy lockdowns comes at a high cost of GDP shrinkage.
• Cost of life-based on life insurance premiums people are willing to pay: In rich societies, large amounts will be paid.  This could be used to compute the social benefits of lockdowns, which will probably have higher values in rich societies than in poor societies where few are covered by life insurance.

Issues in assessing the cost of life: All lives cannot command the same value - If an aged person’s life has the same value as that of a younger person. A person’s own valuation of his life may well differ from the way policymakers are likely to value it.