Cost-benefit of shelter in place

COVID-19 under an electron microscope // image by NIAD

Yesterday, California's governor Gavin Newsom extended the shelter in place order due to COVID-19 through all of May. I wonder what kind of cost-benefit analysis was done, if any.

Nobody likes to think of cost-benefit for lives. It seems crass and uncaring, but with public policy, it has to be done. Every action has a consequence. To those that scream "if it saves just one life it's worth it!", I ask to envision a society without cars. There are around 35,000 car deaths a year. That's 35,000 lives we can save a year to just ban all cars. Is it still worth it? It's easy to see the havoc it would wreak on society as a result. Likewise, if this pandemic results in a death rate similar to the flu, which it seems is more likely after antibody tests have been done in Los Angeles, is it worth shutting the economy down? Okay, what if it's half the rate? A quarter? There is some threshold where reasonable people say, okay, it's not worth destroying people's financial lives over.

Therefore, there is always a cost-benefit. What is someone willing to pay to reduce the risk of death by a certain percentage?

I don't think it's anything a government entity can figure out with any real degree of accuracy.

The first reason is that the value of life and the fair price of risk reduction varies greatly from person to person. The EPA gives a valuation of $7.4 million per person. How relevant is this? Well, probably not much. The vast majority of deaths from COVID-19 are older people with other ailments. Even just instinctively, we understand a child's life is more precious than an older person's life, because a child has many more years of potential for life than an older person.

Everybody values life differently. For victims of suicide, that value of their own life, however irrational and tragic it may have been, seems like it would be near zero since they made the decision to end it. A parent that would sacrifice their own life for their child's likely values their own life highly but their child's even higher. I value my grandmother's life highly and do not want to see her die from the Coronavirus. Knowing my grandmother, she likely would not want us to pay too much to extend her life x number of years. Knowing myself, my parents, and my uncles, we probably would spend that money anyway.

The second reason is that death rate estimates are nearly impossible to know early on. Death estimates were as high as 1.7 million per the CDC estimates early on, just before California's shelter in place orders, and as low as 60,000 by the Institute of Health Metrics and Evaluation two weeks ago. They still can't get a good bead on the death rates, going as low as 0.12% in Santa Clara and as high as 0.8% in New York City in early antibody tests. So never mind even attempting a study of any degree of accuracy that compares deaths with and without shelter in place orders.

So what is California basing its decision on?

Sheltering in place does not come without a cost. Marginalized groups are greatly affected. A computer programmer may be able to work from home, but not the person working at a car wash. Who are the ones with greater savings to weather the storm? It's not the poor. Calls to suicide hotlines are up and suicides themselves will likely be up. Domestic violence is up. Drug abuse treatment has been greatly complicated.

So here's a thought. Why not let people value their own lives and measure their own risk tolerances? The poor people are negatively affected way more than the middle and upper classes. Let people figure out what the risks, costs, and benefits are for their own actions. Is someone afraid they won't be able to feed their children? Let them work and take the necessary precautions. It's not like they want to get sick. Does someone have an elderly parent or grandparent living with them and is able to work from home? Let them decide to work from home. That's the only way to get a real cost-benefit analysis that even somewhat resembles reality.

To be clear, since there are a lot of "you don't want the government to control it so you don't want it done at all!!" nuance-challenged people out there, I am not saying sheltering in place or social distancing shouldn't be done. It should be. A lot of individuals, organizations and companies have done this voluntarily. Sporting events shut down before any state required a shut down. A lot of tech companies told their employees to work from home before a state mandated shut down. The parking lot at my office building was mostly empty before the state mandate was issued. Some private schools closed before public schools did. I am saying that individuals are far better equipped than the government to make these cost benefit analyses for themselves.

Countries like Taiwan, South Korea, Singapore, and Sweden do this and refrained from having these draconian shelter in place laws. They let their citizens choose for themselves how to respond. They also happen to be coping with the pandemic very well. Much better than here in the US.

Imagine that.