Rational public policymaking considers both sides of any proposed policy: benefits and costs. When the costs of lockdown policy have been raised during the COVID era, people have sometimes assumed that those costs are about: “just the economy”, implying that “the economy” is something separable from human health. Yet there are real health and longevity costs of lockdowns, apart from their impacts on the quality of life and overall wellbeing.

In the first half of 2020, the costs of locking down economies should have been weighed against the projected benefits. Best guesses needed to be made about the areas of human wellbeing directly and indirectly affected by lockdown policies. Among other things, we needed to consider the loss of happiness due to loneliness from social isolation, the crowding-out of healthcare for problems other than COVID, the long-term costs to our children and university students of disrupted education, and the economic losses of shuttered businesses, increased inequality, and crowded-out government spending in future years.

In August 2020, I prepared a draft cost-benefit analysis (CBA) for consideration by the Victorian State Parliament1 that was an illustration of how such an exercise could be conducted by the government, whose responsibility it was to provide a rational justification for lockdown policies.

This report updates my outline CBA of August 2020. It includes more context about the methods and about how to approach the robust policy deliberation process that Australian governments should have undertaken early in 2020, and it is structured like a standard CBA except that I do not analyse multiple options. I consider only one: the actual policies adopted in Australia. The alternative that I consider – the benchmark against which the impact of lockdowns is compared – is for the government to have put in place policies that delivered outcomes similar to what Sweden or other “low-restrictions” countries experienced.

Sourcing the data needed for such a process continues to be a challenge, but this is not new. This is a challenge that economists are trained to meet: we try, using the best data available, to come up with reasonable estimates. It would have been nice, for example, to have access to reliable and up-to-date Australian data about various aspects of human wellbeing and suffering. While tools like ANUPoll are useful, we need to build even better tools for analysis of human welfare in Australia. Using conservative assumptions on many different categories of costs and generous assumptions about the benefits of lockdowns, I have pieced together an estimate.

It is in Australia’s interests to provide access to better quality data about its people, activities, and society, so that we can learn more about how to protect and promote welfare. To achieve this, Australia’s departments and research institutions must develop more robust, up-to-date, and relevant data sources and make them available not only to policymakers with a duty to evaluate their policies, but also to independent researchers and the broader public.

I would like to thank Paul Frijters and Michael Baker for their comments on early drafts of this document. Their input greatly helped me to refine the structure and assumptions used.

My deepest heartfelt gratitude goes to Sanjeev Sabhlok, who drew together most of the initial content of this document from existing sources, added and adjusted content diligently at my request, and has been a tireless supporter of the endeavour.

I use the terms COVID and COVID-19 interchangeably in this document. I do not, however, revise the usage in published sources. The disease is increasingly being shortened in the literature to simply “covid.”

Gigi Foster
Sydney, 11 May 2022

Source – https://www.thegreatcovidpanic.com/_files/ugd/23eb94_920d5ddd484640ee8dfca8f045b14886.pdf