<p>Thunstrom et al. at Wyoming have a working paper on this issue although they look at social distancing rather than masks or testing. The basic reasoning is the same though: look at costs of measures for the economy and benefits in terms of lives saved (using the value of a statistical life) and calculate the net benefits. The working paper is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561934" rel="nofollow noreferrer">here</a>.</p>

<p>From the abstract:</p>

<blockquote>
  <p>We examine the net benefits of social distancing to slow the spread of COVID-19 in the United States. Social distancing saves lives but imposes large costs on society due to reduced economic activity. We use epidemiological and economic forecasting to perform a rapid benefit-cost analysis of controlling the COVID-19 outbreak. Assuming that social distancing measures can substantially reduce contacts among individuals, we find net benefits of about $5.2 trillion in our benchmark case. </p>
</blockquote>

CC BY-SA 4.0
2020-04-15T14:51:25.137Z
2020-04-15T14:51:25.137Z
Maarten Punt
<p>Right now, the issue is not so much a dollar cost, rather the physical feasibility of either testing, or the availability of N95 masks.</p>

<p>1) To run a testing programme, a jurisdiction needs the testing capacity, as well as the organisational capacity to administer tests. In many jurisdictions, neither capacity exists at the time of writing (mid-April), although efforts are being made to put them into place. For example, see the California re-opening plan discussion: <a href="https://www.gov.ca.gov/2020/04/14/governor-newsom-outlines-six-critical-indicators-the-state-will-consider-before-modifying-the-stay-at-home-order-and-other-covid-19-interventions/" rel="nofollow noreferrer">link to California plan.</a></p>

<p>2) Requiring N95 masks to be worn is not feasible in anything other than a very small jurisdiction so long as they are in short supply. In the near run, all that could be realistically mandated is the wearing of any covering, including reusable cloth face masks. The cost of wearing such masks is quite small relative to the cost of clothing, which is already mandated by indecent exposure laws. As such, the costs of masks is not a material concern.</p>

<p>The cost issue is the cost of enforcement. Mask-wearing is only one aspect of physical distancing mandates that have to be enforced. The cost of enforcement is not likely to be material when compared to the costs of the loss of productivity (including closing some activities entirely) due to physical distancing rules. That productivity loss is the main concern of economic analyses at present, and there is currently very little solid information to work with.</p>

CC BY-SA 4.0
2020-04-15T17:03:52.563Z
2020-04-15T17:03:52.563Z
Brian Romanchuk
<p>The US has shutdown a significant fraction of its economy because of COVID-19.   Eventually we will all migrate in a pre-COVID direction.  Obviously, too fast would be a medical disaster, too slow prolongs an economic disaster.  What is the specific economic question to determine if it makes economic sense for the population to:</p>

<ol>
<li>Engage in regular mass antibody / <a href="https://en.wikipedia.org/wiki/COVID-19_testing" rel="nofollow noreferrer">genetic testing</a>?</li>
<li>Engage in wearing N95 masks when at work / shopping / public?</li>
</ol>

<p>There is obviously significant cost to each line item: would a ROI analysis be appropriate or is some other question:analytic calculation more appropriate? An answer with example calculations and assumptions is appreciated.</p>

CC BY-SA 4.0
2020-04-15T13:50:22.100Z
This can’t be solely answered in terms of economics, first you need to find out from medical literature what’s the effect of the above measures, I presume masks can slow covid spread but probably not 100% stop it, but then I am not a medical doctor. Next you need to estimate what’s the social value of benefit you get from adopting these measures. After that you could do something like ROI analysis. This is all quite broad to just put into one answer you would probably want to post separate questions for all individual steps of the analysis.
1muflon1
CC BY-SA 4.0
2020-04-15T13:52:21.500Z
This is a controversial subject, with a lot of new research (and little existing applicable theory). Very hard to see how this can have anything other than an opinion-based answer.
Brian Romanchuk
CC BY-SA 4.0
2020-04-15T14:33:12.053Z
@BrianRomanchuk There is a button for this.
Giskard
CC BY-SA 4.0
2020-04-15T16:37:44.310Z
@Giskard - I made the comment to let the user know about the concerns. It was edited, and there’s a chance of answering it now.
Brian Romanchuk
CC BY-SA 4.0
2020-04-15T18:18:57.370Z
@BrianRomanchuk Umm, by edit do you mean the addition of the words "and assumptions"? Seems like a "get out of opinion-based jail free" card.
Giskard
CC BY-SA 4.0
2020-04-15T20:04:50.207Z
It seemed that the question was tightened up more than that.
Brian Romanchuk
<macroeconomics><optimization><covid-19-crisis>
Economics of Justifying N95 masks and Mass COVID testing
gatorback
# Economics of Justifying N95 masks and Mass COVID testing

(Asked by: username_0 on 2020-04-15)

The US has shutdown a significant fraction of its economy because of COVID-19. Eventually we will all migrate in a pre-COVID direction. Obviously, too fast would be a medical disaster, too slow prolongs an economic disaster. What is the specific economic question to determine if it makes economic sense for the population to:

1. Engage in regular mass antibody / [genetic testing](https://en.wikipedia.org/wiki/COVID-19_testing)?
2. Engage in wearing N95 masks when at work / shopping / public?

There is obviously significant cost to each line item: would a ROI analysis be appropriate or is some other question:analytic calculation more appropriate? An answer with example calculations and assumptions is appreciated.

**Tags:** macroeconomics, optimization, covid-19-crisis
> **Comments:**
> **username_1**: This can’t be solely answered in terms of economics, first you need to find out from medical literature what’s the effect of the above measures, I presume masks can slow covid spread but probably not 100% stop it, but then I am not a medical doctor. Next you need to estimate what’s the social value of benefit you get from adopting these measures. After that you could do something like ROI analysis. This is all quite broad to just put into one answer you would probably want to post separate questions for all individual steps of the analysis.  
> **username_2**: This is a controversial subject, with a lot of new research (and little existing applicable theory). Very hard to see how this can have anything other than an opinion-based answer.  
> **username_3**: @BrianRomanchuk There is a button for this.  
> **username_2**: @Giskard - I made the comment to let the user know about the concerns. It was edited, and there’s a chance of answering it now.  
> **username_3**: @BrianRomanchuk Umm, by edit do you mean the addition of the words "and assumptions"? Seems like a "get out of opinion-based jail free" card.  
> **username_2**: It seemed that the question was tightened up more than that.  

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## 2 answers

### Answer by username_4 on 2020-04-15. Score: 1

Thunstrom et al. at Wyoming have a working paper on this issue although they look at social distancing rather than masks or testing. The basic reasoning is the same though: look at costs of measures for the economy and benefits in terms of lives saved (using the value of a statistical life) and calculate the net benefits. The working paper is [here](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561934).

From the abstract:

> We examine the net benefits of social distancing to slow the spread of COVID-19 in the United States. Social distancing saves lives but imposes large costs on society due to reduced economic activity. We use epidemiological and economic forecasting to perform a rapid benefit-cost analysis of controlling the COVID-19 outbreak. Assuming that social distancing measures can substantially reduce contacts among individuals, we find net benefits of about $5.2 trillion in our benchmark case.


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### Answer by username_2 on 2020-04-15. Score: 1

Right now, the issue is not so much a dollar cost, rather the physical feasibility of either testing, or the availability of N95 masks.

1) To run a testing programme, a jurisdiction needs the testing capacity, as well as the organisational capacity to administer tests. In many jurisdictions, neither capacity exists at the time of writing (mid-April), although efforts are being made to put them into place. For example, see the California re-opening plan discussion: [link to California plan.](https://www.gov.ca.gov/2020/04/14/governor-newsom-outlines-six-critical-indicators-the-state-will-consider-before-modifying-the-stay-at-home-order-and-other-covid-19-interventions/)

2) Requiring N95 masks to be worn is not feasible in anything other than a very small jurisdiction so long as they are in short supply. In the near run, all that could be realistically mandated is the wearing of any covering, including reusable cloth face masks. The cost of wearing such masks is quite small relative to the cost of clothing, which is already mandated by indecent exposure laws. As such, the costs of masks is not a material concern.

The cost issue is the cost of enforcement. Mask-wearing is only one aspect of physical distancing mandates that have to be enforced. The cost of enforcement is not likely to be material when compared to the costs of the loss of productivity (including closing some activities entirely) due to physical distancing rules. That productivity loss is the main concern of economic analyses at present, and there is currently very little solid information to work with.


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