Working Paper No. 1340

The Individual Welfare Costs of Stay-at-Home Policies

Published: May 26, 2020Pages: 42Keywords: Stay-at-home orders; welfare effects; choice experimentJEL-codes: D62; I18

The Individual Welfare Costs of Stay-at-Home Policies Ola Andersson, Pol Campos-Mercade, Fredrik Carlsson, Florian Schneider and Erik Wengström


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.

 


Reference:

Andersson, Ola, Pol Campos-Mercade, Fredrik Carlsson, Florian Schneider and Erik Wengström (2020), "The Individual Welfare Costs of Stay-at-Home Policies". IFN Working Paper No. 1340. Stockholm: Research Institute of Industrial Economics.

Ola Andersson

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ola.andersson@ifn.se

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