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Economists back social distancing 34-9 in new Economic Society-Conversation survey





Wes Mountain/The Conversation, CC BY-ND

Peter Martin, Crawford School of Public Policy, Australian National University

Australian economists overwhelmingly back social distancing measures that slow the spread of coronavirus over the alternative of easing restrictions and allowing the spread of the disease to pick up.

But a significant minority, 9 of the 47 leading economists polled in the first of a series of monthly surveys, say they would support an easing of restrictions even if it did allow the spread to accelerate.

The Economic Society of Australia-Conversation monthly poll will build on national polls conducted by the Economic Society, initially in conjunction with Monash University, since 2015.

The economists chosen to take part are Australia’s leaders in fields including microeconomics, macroeconomics, economic modelling and public policy. Among them are former and current government advisers and a former and current member of the Reserve Bank board.

Their responses are given weight by statements explaining their views published in full on The Conversation website and by a requirement that they rank the confidence they have in their responses on a scale of 1 to 10.

What matters is R

R, which is also referred to as R0, R₀, and Rt is the reproduction number of the virus. It a measure of the average number of other people that any person with it will directly infect.






The Conversation, CC BY-ND

An R of 2 means that on average each person with the virus will directly infect two other people in a process that will escalate increasingly quickly until after four sets of contacts 16 people have it, and after 20 sets of contacts more than one million people have it.

This snowballing effect is a property of any R above 1.

At an R below 1 the spread decelerates until very few people have it.

In the early days of the outbreaks, Australia’s value of R was well above 1.

The lockdowns and other restrictions have helped push it down to about 1.

The 47 leading Australian economists selected by the Economic Society of Australia were asked whether they agreed, disagreed, or strongly agreed or strongly disagreed with this proposition:


The benefits to Australian society of maintaining social distancing measures sufficient to keep R less than 1 for COVID-19 are likely to exceed the costs.

The proposition suggests that in the present context it is likely to be worthwhile to continue to maintain the restrictions that are needed to push R below 1 and keep it there.

Almost three quarters of the economists surveyed – 34 out of 47 – backed the proposition, 23 of them “strongly”.

Only nine disagreed, and only one strongly.






The Conversation, CC BY-ND

The arguments put for the worth of maintaining social distancing measures sufficient to keep R below 1 include avoiding “tens or hundreds of thousands of avoidable deaths” (John Quiggin) and allowing the economy to return to normal sooner than otherwise by escaping the need for “repeated lockdowns” that might be needed if the disease got out of control again (Ian Harper).

Chris Edmond uses the analogy of the Phillips Curve that is meant to show the the tradeoff between levels of inflation and unemployment.

Although it shows a tradeoff in the short term (more inflation results in lower unemployment) in the longer term it finds no such tradeoff. More inflation simply leads to higher prices with unemployment being no lower.





Read more:
Eradicating the COVID-19 coronavirus is also the best economic strategy


 

“In a similar way, there is no long-run trade off between public health and the health of the economy in responding to the COVID-19 crisis,” he says.

Lifting restrictions “risks the worst of all worlds, compromising our public health goals and at the same time not getting a proper economic recovery”.

Stefanie Schurer quotes a German proverb: better a painful ending than an endless pain.

Lifting restrictions “worst of all worlds”

She says a short and medium term failure to eliminate, or at least slow down, the spread of COVID-19 would entail significant longer-run political, economic and social costs.

Renee Fry-McKibbin points out that that even if the deaths from reopening economic activity turn out not to be high, we have no idea yet of the long term health consequences of exposing more people to COVID-19.

“Will people suffer from respiratory issues going forward requiring ongoing medical attention?” she asks. “We have incomplete information on the actual costs and benefits.”

Saul Eslake, who can see the worth of continued restrictions that keep R below 1, cautions that the longer they remain in place, the more the case for reopening will grow.

Yet the costs of restrictions are growing

Craig Emerson says keeping R below 1 should be merely a “guiding principle” rather than a binding constraint.

“The longer the restrictions are in place, the greater will be the likelihood of links being broken - leading to severe economic hardship, business failures, mortgage defaults, domestic violence, mental health problems, suicide and long-term unemployment, particularly for the young,” he says.

Gigi Foster says, in retrospect, the best thing for Australia to have done would have been to have never had an enforced lockdown, but to have encouraged people to continue to behave as normally as possible while taking precautions, as in Sweden, allowing young and healthy people to acquire immunity in order to protect more vulnerable people, in this and in future waves of the virus.

She suspects the costs of continued restrictions that keep R below 1 outweigh the benefits, including benefits measured in quality-adjusted life years saved.





Read more:
COVID lockdowns have human costs as well as benefits. It's time to consider both


 

Hugh Sibley says that by making progress towards eliminating the virus we have eliminated the option of acquiring the mass immunity that would make it easier to live with it.

“We have, in effect, dug ourselves into a hole,” he says. “And we are now congratulating ourselves how deep that hole is. Too few people are asking how we get out.”

Supporters more certain than opponents

When responses to the survey are weighted by the confidence respondents have in them, opposition to restrictions weakens.

Unweighted for confidence, 19% of respondents oppose the proposition that restrictions that keep R below 1 are likely to be value for money.

Weighted for (lack of) confidence, opposition falls to 15.4%.






The Conversation, CC BY-ND

Unweighted for confidence, 72.3% support the proposition that restrictions that keep R below 1 are likely to be value for money.

Weighted for confidence, that support grows to 77.1%

The proportion strongly agreeing with the proposition grows from 48.9% to 54.8%

Put another way, when weighted for confidence, a clear majority of the economists surveyed strongly support the proposition that the benefits to society from maintaining social distancing measures sufficient to keep R less than 1 are likely to exceed the costs.


Individual responses

The Conversation


Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 


Responses (47)


 

Peter Abelson

Disagree

3

I disagree with the statement because it implies that we (Australia) must maintain substantial social distancing measure to keep R<1. It appears to me that going forward we (Australia) can keep R<1 with substantial reductions in the existing social distancing measures (not maintaining present social distancing restrictions as implied by the statement) and thus with relatively low economic costs going forwards. However, this premise is essentially a public health prediction on which economists should take advice from the relevant experts. Consequently, as an economist I put low certainty on this view. I note also that this does not include changes to other restrictions, such as relaxation of international travel restrictions.


 

Garry Barrett

Strongly agree

9

There are immediate economic costs of strict social distancing measures enacted to limit the spread of COVID-19. Studies of the Spanish Influenza pandemic indicate that cities in the US that moved quickly to strict social distancing (or economic lock-down) measures experienced better health and economic outcomes. There are also important distributional issues to consider - there are policy levers to share the costs of the economic disruption across society and ameliorate the most severe impacts. The health and mortality impacts of allowing R>1 will severely impact the most vulnerable sections of our community.


 

Harry Bloch

Strongly agree

8

Based on the experience to date of countries across the globe, some form of social-distancing measures appear necessary to avoid overwhelming health systems. Some countries, such as Australia, have acted before their health systems are challenged, while others have waited until infections are out of control. The economic pain as well as the number of infections and deaths appear higher with acting later on social distancing (compare the experience of Australia and the US). Extrapolating from this experience, a second wave of infections would be more costly in terms of the economy and health than keeping new infections under control, which roughly equates to keeping R<1 most of the time. With low numbers of new cases, R is likely to occasionally exceed 1, but R>1 for a sustained period would inevitably lead to the reintroduction of strict controls on social and business activity as well as increased deaths and compromised health systems.


 

Alison Booth

Strongly agree

9

It is vital to relax social distancing slowly in order to monitor infection rates, gain more information about the pandemic and its behaviour, avoid the costs of having to reimpose tighter restrictions, make sure we have plentiful supplies of protective equipment, target research to vaccination development and also treatments so we are prepared in case (as is likely based on other countries? experiences) R starts growing again. At the same time, policy should be directed towards cushioning the impact on the less well-off of this major shock to our economy. For example, we should think about an intergenerational compact - which is to say how the winners of continued lockdown (the older folk, typically) might compensate the losers (the younger folk, particularly those in insecure employment whose prospects are so poor). Policy should also be working to restructure our economy in imaginative - and social-welfare enhancing - ways, as has sometimes occurred in postwar reconstruction. This could be done to take into account the goal of reducing climate change, which could well be our next big shock to the economy.


 

Jeff Borland

Strongly agree

8

The policy priority should be to choose the right time to remove business restrictions put in place to ensure social distancing. For as long as economic activity is restricted by shut-downs, the scope for economic recovery will be limited. This doesn?t mean, however, that we should be racing to remove restrictions. Of course at the moment there is a trade-off between business restrictions and employment - with serious adverse consequences for well-being. But the time horizon we should have in mind is the next 12 to 18 months. The policy objective for government should be to achieve the highest average level of employment over that whole time period. We can only meet this objective if we ensure that relaxing business restrictions does not create an upsurge in COVID-19 cases. Because every time there is an upsurge (due to R>1), economic activity will need to be shut down again. Every time that happens we will be back to losing 10 to 15 per cent of jobs. Likely more as the effects of reduced income and wealth on consumer spending (and then business investment) gradually accumulate.


 

Robert Breunig

Disagree

8

Low rates of COVID-19 and very low rates of transmission in the population co-exist with government continuing to enforce very strict rules that damage the economy. Few lives will be saved relative to the huge costs to the economy.


 

Lisa Cameron

Strongly agree

8

Maintaining sufficient social distancing measures now will result in a higher immediate economic cost but lower economic costs in the long run. Relaxing social distancing measures too quickly increases the risk of further waves of the virus and future lock-downs of the economy. Reintroduction of more stringent social distancing measures in the future not only come with their own direct economic costs but the increased uncertainty associated with seesawing between lock-downs and lesser restrictions would negatively affect consumer and business confidence and increase financial volatility. The end result would be a substantial increase in the total economic cost of the virus and a postponement of the return to normality.


 

Fabrizio Carmignani

Agree

9

A policy that ensures R<1 is preferable to a policy that ensures R>1, because with the latter the disease continues to spread and this increases economic costs in the long-term. Social distancing and other non pharmaceutical interventions however need to be accompanied by a "rescue package" to (i) strengthen the capacity of the health care system (ii) ensure that workers stay employed and collect their wages (or alternatively receive income support) (iii) prevent bankruptcies of solvent businesses (iv) ensure the stability of the banking sector


 

Bruce Chapman

Agree

7


 

Ken Clements

Strongly agree

9


 

Deborah Cobb-Clark

Agree

8


 

Lin Crase

Agree

8

Clearly, the cost impacts will vary greatly across individuals and sectors. For individuals with the capacity to work remotely the costs may prove trivial or even give rise to benefits (e.g. reduced travel time). Where this is not the case the impacts on individuals could be severe. It is also the case that the health benefits will likely be influenced by a range of other factors (e.g. degree of compliance). On balance, the Australian economy is well-placed to integrate social distancing - we enjoy geographic and technological advantages not available to others. However, given our status as a small open economy the big question is really about how particular measures adopted abroad impact our capacity to trade.


 

Kevin Davis

Uncertain

5

It depends very much on long such measures are needed and the impact they have on the viability of different types of businesses.


 

Janine Dixon

Strongly agree

8

An assessment of this proposition rests on a what is assumed about the counter factual - a world in which the virus is at large and individuals need to make their own decisions about how to protect themselves and others. Mandated social distancing measures have levelled the playing field and protected vulnerable cohorts of the population. Without a coordinated response, cautious and at-risk individuals would have been at a significant disadvantage. The coordinated response has been effective at containing the pandemic and households have been supported by the $130 billion Jobkeeper package, along with Jobseeker and other stimulus payments. Acknowledging that unemployment and economic downturn puts lives at risk, social distancing measures need to be lifted as soon as it is safe to do so. However a poorly managed response would also have placed lives at risk (in addition to the deaths and long term health impacts from Covid-19) and potentially caused a similar level of economic damage.


 

Brian Dollery

Strongly disagree

8

The opportunity costs of maintaining current measures in terms of both community health and economics are growing. A better mix is required, which opens the economy but targets vulnerable groups, like frail elderly persons, for ongoing protection.


 

Uwe Dulleck

Disagree

3

This is a challenging question for an economist, one where several assumptions are needed. First, without question, at the current stage, the lock down saves lives - it is hard to allocate value in $ of GDP to that - this is my first reason to disagree with a general statement like this. The second is maybe closer to where economists can have a say. Even if we only look at GDP, with the implication that lost economic activity implies less resources to invest into a health system that can reduce Australian?s exposure to (other) health risks, I find it likely recovery is dependent on succeeding in controlling the virus. Our economy will not be able to fully recover if people do not feel safe to interact. In particular now that almost everywhere in the world people have experienced COVID as a threat to them (and in particular for younger cohorts the risk may be inflated) they will not easily engage in many parts of the economy if that is risky. This may be particularly obvious With tourism and (International) education as important segments of the Australian Economy. Demand, In this sectors as well as in most others, is an important factor for Australia?s growth and on people feeling safe. In that sense the cost of protecting Australia (and in the future tourists and international students when they can return) depends on successfully controlling COVID and I feel the costs - at least in the medium to longterm - are not higher than the benefits.


 

Chris Edmond

Strongly agree

9

Australia will be better off with policies that keep R<1. We need to always remember that the choice is not between a deep recession or a public health catastrophe. It is a choice between 1) a deep recession vs. 2) a deep recession *and* a public health catastrophe - as in the US, UK, Italy etc. The best prospects for the economic recovery involve comprehensively beating the pandemic, eradication or something close to it. Think of it as an investment that pays off in the future. Absent near-eradication or a vaccine, lifting social-distancing restrictions will not let the economy bounce back to near-normal because people, fearing for their health, will still refrain from many kinds of economic activity. They still won't go back to bars and restaurants at normal rates. Low-margin businesses will still struggle to be viable. In other words, this approach risks the worst of all worlds, compromising our public health goals and at the same time not getting a proper economic recovery. An analogy from macroeconomics may help. Friedman and Phelps argued that although there may appear to be a short-run Phillips curve tradeoff between unemployment and inflation, there is no such trade-off in the long run. Attempts to keep unemployment low at the price of higher inflation simply lead in the long run to more inflation and unemployment that ends up being no lower. In a similar way, there is no long run trade off between public health and the health of the economy in responding to the COVID-19 crisis.


 

Craig Emerson

Disagree

6

The economic challenge during the COVID-19 pandemic is to maintain as much as practicable the links between employees and their employing businesses and between those businesses and the economy. The longer the restrictions are in place the greater will be the likelihood of those links being broken - leading to severe economic hardship, business failures, mortgage defaults, domestic violence, mental health problems, suicide and long-term unemployment, particularly for the young. In this deepest recession since the Great Depression, the worst affected are young people and especially young women. Keeping R at less than 1 as an absolutely binding constraint could lead to all these hardships. It nevertheless should be a key, non-binding, guiding principle but not a rule.


 

Saul Eslake

Agree

7

To date, at least, I think the answer to the question is an unambiguous 'yes', unless you are willing to discount the value assigned to the lives of older people (who would bear the brunt of the higher death toll that would result from R being greater than 1 for an extended period. However, the longer that restrictions had remained in place, the less unambiguous the answer would have become. Fortunately, however, we have already begun to relax restrictions. (Incidentally, I can't help but wonder why we have never asked this question of the cost and benefits of 'counter-terrorism' measures.


 

Allan Fels

Uncertain

10


 

Gigi Foster

Disagree

7

The key word is "likely", and the hidden implication of the question is that we are comparing the costs of a policy environment in which "eventually everyone gets it" to the costs of a policy environment in which it is "eventually eradicated". The latter state of the world is unlikely to be achievable. Many people in Australia likely already have had the virus, without knowledge or symptoms (but hopefully, now, with antibodies). Moreover, trying to resume operations domestically and with the rest of the world while at the same time moving towards eradication of the virus through implementing the degree of social distancing required to drive R below 1 will create continuing, massive economic costs that I suspect are far greater than the (quality life years-reckoned) cost of the COVID-19 deaths and suffering that we would thereby avoid. I think it is far more likely that the ex-post optimal thing for Australia to have done is to never have had an enforced lockdown, to have encouraged people to continue to operate as normally as possible while taking sensible precautions (see Sweden), and to have moved over the past few months towards more and more young and healthy people building immunity in order to protect our most vulnerable people moving forward, including potentially into the second and later waves of the virus.


 

John Freebairn

Uncertain

4

The appropriate answer is a level and intensity of restrictions that equates marginal benefits of improved health outcomes with the marginal cost of loss of economic activity. As with road usage, we compare deaths, etc of accidents with benefits of transport of people and of goods and services. There is imperfect information about benefits and costs. For benefits; production function linking reduced deaths and other adverse health effects (including mental health costs and costs of postponed elective surgery) to length and severity of restrictions; and the value to be placed on lives saved, lower morbidity and anxiety, which is controversial -- such as quality of life years probabilities and costs of second -- and subsequent-round outbreak waves. For costs; first-round supply closures and loss of production and employment, and addition to inequity; recovery stage effects of slow re-build of aggregate demand to return towards full employment and production,; threats to international trade and loss of efficiency and productivity. Reality is one of forthcoming information on both the benefit and supply sides. Hence, an adaptive decision making strategy which involves experimentation, some failures with hindsight, and decision adjustments in response to new information.


 

Renee Fry-McKibbin

Strongly agree

8

The cause of the recession in Australia will be a result of many factors, including external factors beyond our control such as the global fall in demand and trade, lack of tourist arrivals, no immigration, and no incoming international students. Social distancing is just one contributor to the economic shock that we are facing, so the costs and benefits need to be weighed against the counterfactual of a very different world to what we had in 2019. The counterfactual is of a recession regardless of social distancing policies. We need a healthy population to rebuild in a fundamentally changed world. A healthy population could be our advantage in the future if thought is put into the management of the opening of the economy later. We also do not have a good idea of the long term health costs of a significant proportion of the population contracting COVID-19. Perhaps many would recover from the illness in the short term, but how would their long term health prospects be affected? Will people suffer from respiratory issues going forward requiring ongoing medical attention, for example? We have incomplete information on the actual costs and benefits.


 

Lata Gangadharan

Agree

8

We do not yet know the full health implications of COVID-19. The economic implications are more obvious and while the economic impacts can not be ignored, social restrictions should be eased only gradually, keeping the health guidelines in mind. Australia has done exceptionally well at reducing the case load but this needs to be monitored. Testing could be increased before restrictions are eased.


 

Ian Harper

Strongly agree

8

Plausible scenario analysis shows that the costs of allowing the virus to spread widely and rapidly within the community (i.e., allowing R>1 consistently) outweigh the costs of social distancing and other measures aimed at keeping R<1. In the former case, the forecast economic recession would be longer and deeper, driven primarily by ongoing disruption to workplaces, more widespread bankruptcies and severe loss of consumer confidence attending the inevitable "sawtooth" pattern of lockdown and release. Keeping R<1 allows confidence to return faster than otherwise and avoids repeated lockdowns, allowing more normal patterns of consumer and producer behaviour to resume sooner than otherwise, notwithstanding the costs of social distancing.


 

John Hewson

Agree

7

Assuming economic and social costs being difficult to quantify, especially likely impact on mental illness.


 

Richard Holden

Strongly agree

10

If R>1 then the virus grows exponentially, eventually killing tens to hundreds of thousands of Australians.


 

Geoffrey Kingston

Agree

8

It is hard to argue with this proposition. We want to continue saving lives and preventing hospitals from becoming overloaded. By the same token we now need to reopen industries, progressively, and conditional at each stage on R remaining less than 1.


 

Michael KNOX

Strongly disagree

8

It is hard to argue with this proposition. We want to continue saving lives and preventing hospitals from becoming overloaded. By the same token we now need to reopen industries, progressively, and conditional at each stage on R remaining less than 1. "A very good place to start when disussing this issue is the New York Fed piece by Correia, Luck and Verner of March 27, 2020. The piece is called "[Fight the Pandemic, Save the Economy: Lessons from the 1918 Flu](https://libertystreeteconomics.newyorkfed.org/2020/03/fight-the-pandemic-save-the-economy-lessons-from-the-1918-flu.html)". The authors look at the effect of Non Pharmaceutical Interventions (NPIs) in a large number of US cities in the Pandemic of 1918. NPIs include social distancing and other strategies currently in place. They find that the cities that that had the most substantial NPI program and maintained it the longest had the best growth in employment after the pandemic. This suggested that that our own program of NPIs should have substantial economic rewards in the years that follow.


 

Emily Lancsar

Strongly agree

8

Costs include reduced economic activity, higher unemployment, and potential wellbeing loss from constrained social freedoms. Economic costs are appropriately reduced via strong economic policy response, particularly, but not exclusively, via fiscal policy. Another potential cost is secondary morbidity and mortality associated with the displacement of usual or non-COVID care, induced by supply side crowding out ? e.g. of elective surgery to increase COVID related health system capacity ? or by demand side delay in seeking usual care due to concern of exposure to the virus. However, the degree to which usual care has been displaced is yet to be quantified and likely mitigated by recent Government initiatives (e.g. introduction of Medical Benefits Schedule telehealth items, expansion of the Pharmaceutical Benefits Scheme continued medicine dispensing arrangements) and by the speed with which Australia ?flattened the curve? and was able to recommence elective surgery etc. The benefits importantly include reduced morbidity and mortality from COVID-19 (cases avoided and lives saved) and avoiding further economic loss associated with a second wave if R were not maintained <1. Keeping R<1 should also engender consumer confidence. Possible tradeoff between costs and benefits becomes sharper the closer we move to zero cases so another relevant issue is the timing and staging of easing of social distancing. The proposition could naturally lead to a desire to quantify relative costs and benefits. This leads not only to monetising the value of life (e.g. via value of a statistical life) and health (e.g. via monetary value of a quality adjusted life year (QALY)), but in doing so important to note that the value attached to life and health is normative and depends on value judgements of society and policy makers. Examples include different value of statistical life estimates applied in different contexts and differing monetary value of a quality life years based for for example on age, severity, proximity to end of life when that is considered premature, and the concept of "rule of rescue": perceived duty to save endangered life where possible, particularly where those lives are identifiable.


 

Guay Lim

Uncertain

8

Whether the benefits are likely to exceed the costs is uncertain as we are talking about concepts that are hard to measure/quantify. Are direct fiscal payments costs and/or benefits? The evaluation will also depend on how long social distancing measures will be in place, the severity/strictness of the measures as well as the nature of financial and non-financial supports. The prevalence of testing and contact tracing will also be important to the analysis.


 

Tony Makin

Disagree

5

This question assumes there is a trade-off between saving lives and maintaining employment and general economic well-being. An empirical answer to the question would depend on whether the total benefit of saving lives through social distancing, valued by number of lives saved, exceeded the total costs incurred, directly and indirectly (including budget outlays on extra health spending, income support, wage subsidies, lost income, lost wealth, mental health, depression, domestic violence, lost human capital from missed schooling, and suicide). Estimating precise monetary values for some of these social cost variables and appropriately aggregating would be very challenging to say the least. The number of lives social distancing measures has saved is also highly uncertain, with estimates likely to vary greatly according to different epidemiology modelling approaches. Then there is the thorny question of how to value lives by age cohort. Nonetheless, in battles, lives are not infinitely valued, as any armed services officer could attest. What degree of social distancing is required to keep R<1 is also uncertain. It's conceivable that social distancing could deliver a net benefit on this basis by preventing a very high morbidity, though this seems unlikely in the current context.


 

Warwick McKibbin

Strongly agree

9

The balance between costs and benefits depends very much on the way in which social distancing is implemented and what other policies are implemented as well. There is clear evidence that in countries where R>1 there has been large economic and human costs so there are clear benefits from containing the pandemic. Social distancing alone will probably not be effective unless there is a strong and transparent system of testing for COVID-19, tracing contacts of anyone who tests positive and quickly isolating cases.


 

Flavio Menezes

Strongly agree

9

The key is to consider what might have happened if we had not acted early on closing borders, introducing social distance rules and the lockdown. Absent these measures, the rapid spread of the virus would have likely caused as much if not more economic damage, in addition to significant loss of life. The experience of countries that were late, or that proceeded in a disorganised fashion, in their suppression efforts illustrate what might have happened in Australia absent the restrictions that were imposed. While some commentators point to Sweden as an example involving less restrictive (or voluntary) measures, their approach has entailed significant loss of life (over 3,000 deaths as of the 8th of May) and it is unclear whether their economy is faring/will fare better than ours.


 

James Morley

Strongly agree

10

Taking a dynamic perspective of the tradeoffs involved, it is clear that the future economic and social costs of COVID-19 if a medical crisis is averted are far less than the counterfactual economic and social costs associated with allowing a highly contagious and deadly virus to spread with R>0. Many of the social costs some economists link to social distancing restrictions would actually be worse given the economic fallout from a more severe recession following a mass outbreak of the virus. Furthermore, other policies should be used as much as possible to address economic and social costs of COVID-19. Social distancing restrictions should only be relaxed to the extent medical advice suggests it would keep R<1. I have written about these tradeoffs and the need to consider other policies at [Inside Story]( https://insidestory.org.au/covid-19-trade-offs-the-full-story/) and [The Conversation](https://theconversation.com/its-just-started-well-need-war-bonds-and-stimulus-on-a-scale-not-seen-in-our-lifetimes-137155).


 

Sue Richardson

Strongly agree

7

If the infection rate was widespread and growing, I think that individuals would themselves take steps to distance and isolate themselves, regardless of what the rules were. I think it is very unlikely that people would behave, as consumers and as workers, as they did before the pandemic, if there was widespread transmission occurring. That is, a return to 'normal' is not an available option.


 

Rana Roy

Strongly agree

9

The proposition before us can be interpreted in two ways. Interpreted in a narrowly literal sense, we are being asked to assess the likelihood of a positive benefit-cost ratio exclusively from ?maintaining social distancing measures sufficient to keep R<1 for COVID-19? tout court. Interpreted more expansively, we are being asked to assess the likelihood of a positive benefit-cost ratio from maintaining the said measures as they are meant to operate in Australia today. That is: as one instrument in a larger intervention, which is also meant to include (1) the provision of additional resources to the health system aimed at supressing an increase in excess mortality from other causes; (2) fiscal policies designed to minimise job losses (Jobkeeper) and provide an enhanced safety net for those who do lose their jobs (Jobseeker); and (3) the provision of protective equipment and other safety measures for workers with unchanged or increased workloads, including not only all medical staff but also the millions of blue-collar workers who have kept the Australian economy and society functioning through the crisis (in food production, transportation, distribution and delivery, in mining and in manufacture, in garbage collection and in street-cleaning, and so on). Had I interpreted the proposition in a narrowly literal sense, my answer would have been ?Uncertain?. A definite answer, whether in the affirmative or in the negative, requires at a minimum an ex ante estimate of all-cause excess mortality over the relevant period in addition to an ex ante estimate of the reduction in mortalities from COVID-19 resulting from social distancing measures. And it is perfectly possible to imagine a hypothetical scenario of an inadequately resourced health system, a collapsed labour market, and a brutal reduction in conditions of work delivering an increase in excess mortality from other causes that is larger than the achieved reduction in mortalities from COVID-19. The affirmative answer I have recorded in this poll is conditional on the above-described expansive interpretation of the proposition being polled. My affirmative answer follows from a single simple epidemiological assumption and a single simple economic calculation. I assume that the official advice to the Australian Government on projected deaths from COVID-19 in a laissez-faire reference scenario is roughly correct. That is: ?up to 150,000 deaths?, derived from an infection rate of 60% and a fatality rate of 1%. And I note that this projection is roughly in line with projections for comparable countries by national and international government agencies and reputable independent research centres. Now I apply here ? as I have done in all my published studies for the OECD, WHO, UNDP, UNEP, et al. ? what I regard as the only well-founded method by which to measure the cost of mortalities at the level of society as a whole: the ?value of statistical life? (VSL), as derived from aggregating individuals? willingness-to-pay to secure a marginal reduction in the risk of premature death. The VSL value used in Australia is roughly $5 million. Hence, as at today, this gives us a gross benefit, relative to the reference scenario, of ?up to $750 billion? minus $0.5 billion for the deaths from COVID-19 to date, before deducting the relevant costs to arrive at the net benefit. Looking ahead, I expect deaths from COVID-19 in Australia to rise well above the current level of roughly 100. And I expect the costs of Australia?s mitigation measures to be very large. But I do expect the sum of these losses to be less than the initial ex ante gain of ?up to $750 billion?.


 

Stefanie Schurer

Strongly agree

9

In German we say: better a painful ending than an endless pain. Let me explain this. Short and medium term failure to eliminate, or at least slow down the spread of, the coronavirus virus will entail significant political, economic and social costs in the long run. Social distancing measures are no unjustified nuisance. Currently, they are the only option available to policy makers to curtail the capacity of the virus to spread ? measured by R, the so-called reproduction factor. The lower R, the lower is the spread of the virus. Some have argued that we should have gone for herd immunity to deal with the crisis. To achieve herd immunity, a certain share of the population must be infected and we need to assume that exposure to the coronavirus means protection against future infections. R determines how big that share must be. For instance, in a society under normal conditions, Covid's R ~ 2.5. This means that one person infected would spread it to 2.5 others. It has been widely discussed that about 60% of the population would need to be both infected and become immune to the virus (share=1-1/R). Would we like to expose 60% of the population to the virus, knowing that there is no treatment other than ventilation and that about 1% - although a contestable number - are likely to die? I do not think that policy makers would find volunteers for this experiment. Maybe it is better to make the virus behave a bit more like the flu, slow the speed of its spread to R~1.3. In this case, we would still need about 23% of the population to be exposed to achieve herd immunity. With the assumed case mortality rate, that would still imply a loss of life of 57,500 Australians (#deaths=1% of the 23% of population, ~25 million, who were exposed). If that number is still not acceptable, or if we cannot ensure that exposure means protection, which we cannot, then the only other option is virus elimination. This could be achieved, if R<1, or in plain words: every corona-infected person passes the virus on to less than one other person. Germany, which used very strict lockdown measures, achieved this for some time. When R was steadily < 1, and when a role-model testing and tracking system was in place, the Merkel government prepared for opening up the economy. Recent reports have shown that R has increased already to above 1 with the opening of the economy. The world has its eyes on Germany to learn how effective its strategy is to eliminate the virus. So, why do I think that keeping R<1, with the help of social distancing measures, outweighs the likely costs? To answer this question, one needs to think about both short-term and the long-term costs, and the dynamics in the lifecycle of a virus. The short-term costs are predictable. Australia will experience its first recession in almost three decades. Unemployment will rise, businesses will go bankrupt. Whether such recession will cause more deaths than Covid-19, cannot be answered yet. The good news is that the overall evidence from international data, and work that we have produced for Australia, suggests that recessions, if anything reduce mortality. The other good news is that Australia can buffer the economic consequences of the temporary hibernation of its economy through expansive fiscal policy. Expectations of a recession and the practical consequences of the lockdown will also entail psychic costs. They will certainly strain the emotional health of individuals and families, in particular the most vulnerable segments of the population: the old because of loneliness, and the children because of exposure to stressed family environments, a breeding ground for violence and maltreatment. These psychic costs must be taken very seriously by policymakers. Increased resource allocations to mental health and family service providers will be critical, so that they can increase their support services and target where advisable. A policy alternative that avoids, instead of alleviates, such economic and psychic short-term costs, is not advisable. The alternative would have been to have no social distancing measures at all, or to relax those in place prematurely. By prematurely, I mean before R is below 1 for extended periods of time (which scientists say is now happening in Australia). If social distancing measures were relaxed when R were 1 or greater, it would have the consequence that new hot spots of infections and deaths will emerge months down the track. It could even be that the virus comes back in full force, with reproduction rates way above 2. This would force politicians to reintroduce even harsher social distancing measures than the ones we have experienced in the past ten weeks. Such measures would certainly extinguish any revived economic activity. Theoretically, this could happen several times into the future, stretching out the battle against Covid-19 over years. Like a yoyo, the economy would bounce up and down between lockdown and easing, forcing companies, employers, employees, families, carers, and essential service providers to adapt over and over again. The uncertainty would be an emotionally draining and financially expensive exercise. In modern democracies, it is excruciatingly painful for politicians to restrict citizens? basic human rights. It is unlikely to see such rights restricted on a recurring basis without serious social unrest. Although Australia is a rich country, the economy cannot afford to roll out job and business rescue programs, the current one valued at 16% of GDP, whenever a new infection hotspot requires yet another hibernation of the economy. Thus, we must eliminate the virus now. A painful ending, achievable through keeping R<1, is economically and socially less costly, than the endless pain of allowing R to float freely above 1.


 

Jeffrey Sheen

Disagree

8

The key is to find the necessary and sufficient measures that keep R<1. The problem now is that, apart from a few countries like Sweden, most governments have generally applied sufficient conditions that have curbed infections but at way too high a cost. There are measures other than social distancing that contribute to keeping R<1, such as hygiene and extensive testing for infection and antibodies that allow for a more accurate targeting of all measures.


 

Hugh Sibly

Disagree

8

I have interpreted the question as asking whether it is advisable to maintain R<1 at all times (thus keep infection rates minuscule), and to keep the current social distancing measures in place to ensure that. In the absence of effective treatment or a vaccine for covid-19, Australia has no choice but to adapt to the presence of the virus in our community. We should enact the least damaging policies to navigate through the pandemic, with the goal of the return to normal economic and social interaction with each other and the rest of the world. This means adopting the minimum level of community restrictions necessary to keep infections within our capacity to provide appropriate medical treatment. These restrictions should be scientifically validated methods of slowing the spread, enacted in the least cost way. The current set of restrictions have been extraordinarily damaging to sections of the community, and the impact to the broader society will continue for years. Many current restrictions are not only excessive to maintain sufficiently low infection rates, but overly blunt. A great many restricted activities could be conducted relatively safely provided sensible social distancing is maintained. Other than preparing the medical system (which has caused it to be underutilised) Australia has not make much progress to the transition of living with the virus. By remaining a vulnerable population we have, in effect, dug ourselves into a hole. And are now congratulating ourselves how deep that hole is. Too few people are asking how we get out.


 

Helen Silver

Strongly agree

8

The costs if there is a second wave of infections both to the health system and the economy require we enforce the social distancing measures advised by the government.


 

Nigel Stapledon

Agree

3

The health benefit is very clear. Sustained R>1 implies exponential outbreak. But R<1 could be elimination or containment, and the economic cost of the two could be very different. The more nuanced question would be the cost of elimination (and stay eliminated) strategy vs containment strategy (able to put out spot fires) which implies taking some risks. Elimination could free up the domestic economy but would for example require borders closed for a long period. For an open economy like Australia that will impose a large cost (on international traded services). It would probably preclude even the small risk with say allowing foreign students to return - down the gurgler for universities. We need to take some non-zero level of risk. Otherwise, the cost will be probably be too high.


 

Julie Toth

Strongly agree

9

The horrendous human and economic toll in other countries shows us that Australia has escaped this global crisis relatively well, so far. The measures taken appear to be working, so far. Even though this virus appears to be deadliest for older people, the Economist reports that each COVID-19 death in Italy and the UK has lost an average of 11 life years. Many more people are gravely ill for extended periods. These losses represent huge personal, social and economic costs. The situation in developing countries is even worse. We won't know exactly how much Australia's activity restrictions will cost in total until well after this crisis has abated. Judging from current international events, it is difficult to imagine Australia's avoidance costs being greater than the cost of the devastation that we have avoided. The economic disruption is large, either way. It is worth the effort we are all taking to minimise this new risk to human health and wellbeing.


 

joaquin vespignani

Strongly agree

9

International evidence from Denmark, New Zealand, Honk Kong and Taiwan shows that social distance measure work well, meaning that the economy may re-open relative sooner after strict social distance measures. The social and economic cost of not implementing social distance policies, lead to a much higher cost for countries which delay the social distance restrictions (e.g. Sweden, Russia, the U.S. amongst others). The reality is that there is not health system prepare for such as severe pandemic, and therefore social distance measures are required. The relaxation of these measures should be gradual, and some outbreaks are also expected in the process, as we learn more about the virus.