Thoughts on economics and liberty

Category: Public policy

 Cost-benefit analyses of the 2020 lockdowns


An extract from the draft CBA that I’d worked on with Prof. Gigi Foster

There are a number of ways to undertake a cost-benefit analysis. A useful summary of methods is provided by Paul Frijters in the Vienna Yearbook of Population Research.[1] Different authors inevitably use different methods and currencies, and include different factors in their analysis. Data shortcomings, which are inevitable, also add to the lack of direct comparability of the methods or outcomes of most CBAs.

This diversity has a compelling advantage. When different CBAs conducted by independent researchers taking different, yet careful and broadly reasonable, approaches arrive at a similar basic conclusion, then the strength of that conclusion is enhanced. In the case of COVID lockdowns, many scholars have conducted CBAs of lockdown policies, and in the main, these assessments have concluded that lockdowns are harmful on net and therefore not a good policy option. In science, this is what we would term a robust finding.

A few of the many CBAs of lockdown policies that have been undertaken across the world are outlined below.

1.1.1         Douglas Allen’s September 2021 CBA for Canada, and review of over 100 CBAs

On 29 September 2021, Douglas Allen, Professor of Economics at Simon Fraser University, published a review of 100 cost-benefit analyses of the COVID lockdowns – most of which he found to have significant shortcomings. He then prepared his own analysis of lockdowns in Canada, and found that the costs of lockdowns exceeded their benefits by a factor of 141:

An examination of over 100 Covid-19 studies reveals that many relied on false assumptions that over-estimated the benefits and under-estimated the costs of lockdown. The most recent research has shown that lockdowns have had, at best, a marginal effect on the number of Covid-19 deaths. Generally speaking, the ineffectiveness stemmed from individual changes in behavior: either non-compliance or behavior that mimicked lockdowns. The limited effectiveness of lockdowns explains why, after more than one year, the unconditional cumulative Covid-19 deaths per million is not negatively correlated with the stringency of lockdown across countries. Using a method proposed by Professor Bryan Caplan along with estimates of lockdown benefits based on the econometric evidence, I calculate a number of cost/benefit ratios of lockdowns in terms of life-years saved. Using a mid-point estimate for costs and benefits, the reasonable estimate for Canada is a cost/benefit ratio of 141. It is possible that lockdown will go down as one of the greatest peacetime policy failures in modern history.[2]

1.1.2         Martin Lally’s CBA for New Zealand

In New Zealand, Professors Michael Baker[3] and Nick Wilson of Otago University recommended lockdown on 19 March 2020 thus: “New Zealand should consider a short pulse (a few weeks) of intense social distancing, including bringing forward the school holidays and temporary closures of most businesses, social meeting places and public transport.”[4] They added that “[t]he strongest evidence that containment works comes from the remarkable success of China in reversing a large outbreak” (ibid).

Subsequently, Martin Lally[5] conducted a CBA of New Zealand’s lockdowns and concluded that “the nation-wide lockdown strategy was not warranted.” He explains that he takes the “approach of assessing the savings in quality adjusted life years and comparing them to a standard benchmark figure” to ensure “that all quality adjusted life years saved by various health interventions are treated equally, which accords with the ethical principle of equity across people.” He finds that “a Cost per Quality Adjusted Life Year saved by locking down in March 2020” is “at least 13 times the generally employed threshold figure of $62,000 for health interventions in New Zealand.” If one uses Lally’s mid-range estimate for the value of a healthy life year, rather than the high-end estimate he uses in his paper, the costs of lockdowns in New Zealand were around 25 times any benefits.[6]

In other words, Lally finds that the cost to society of saving quality-adjusted COVID lives via lockdowns, even assuming that these lives did actually get saved by lockdowns, is far higher than that of other life-saving public health policies that could have been adopted instead.

1.1.3         Selected other papers

Many other studies have been produced that in some fashion weigh the likely harms and benefits of COVID lockdown policies. A selected few are outlined below for illustrative purposes.

  • On 5 May 2020, Peter Castleden and Nick Hudson of PANDA published a draft cost-benefit analysis of lockdowns in South Africa.[7] A 10 May 2020 version[8] estimates that lockdowns benefits may involve preventing up to 445,901 years of lost life, while lockdowns could cost at least 14 million years of lost life. Comparing the highest benefit from lockdowns with expected harms, the CBA estimated that costs exceed benefits by at least 30 times.[9]
  • In May 2020, the Copenhagen Consensus Center reported the outcomes of its cost-benefit analysis of moderate social distancing in response to the COVID-19 pandemic in Ghana. The analysis recognised many costs of restrictions, including the loss of life and livelihoods they would entail of people far younger than the average COVID victim, and the broad conclusion was that “a policy of moderate movement and livelihood restrictions will leave Ghana much worse off.”[10]
  • The UK Department of Health and Social Care, Office for National Statistics, Government Actuary’s Department and Home Office on 15 July 2020 published a report using the currency of Quality-Adjusted Life Years (QALYs) and stating that “when morbidity is taken into account, the estimates for the health impacts from a lockdown and lockdown induced recession are greater in terms of QALYs than the direct COVID-19 deaths.”[11]
  • A July 2020 paper by Chaudhry et al. in EClinical Medicine found that government actions such as border closures, full lockdowns, and a high rate of COVID-19 testing have not been found to be associated with statistically significant reductions in the number of COVID critical cases or overall mortality.[12]
  • On 18 September 2020 a paper was released by Ben W. Mol and Jonathan Karnon[13] comparing Sweden to Denmark. In the authors’ words, “[c]omparisons of public health interventions for COVID-19 should take into account life years saved and not only lost lives. Strict lockdown costs more than US$130,000 per life year saved. As our all our assumptions were in favour of strict lockdown, a flexible social distancing policy in response to COVID-19 is defendable.”
  • On 21 October 2020 an expert in infectious disease and critical care, Dr. Ari Joffe of the Stollery Children’s Hospital and the University of Alberta, was reported to have found that the cost of lockdowns in Canada was at least 10 times higher than the benefit in terms of population health and well-being. His analysis, which accounts for numerous variables such as economic recession, social isolation and impacts on life expectancy, education, and other health-care priorities – both in Canada and worldwide – was published in February 2021.[14]
  • Prof John Gibson of New Zealand of the University of Waikato produced the following three papers in 2020:
  • “Hard, not early: Putting the New Zealand Covid-19 response in context”, New Zealand Economic Papers.[15]
  • “Government mandated lockdowns do not reduce Covid-19 deaths: Implications for evaluating the stringent New Zealand response”, New Zealand Economic Papers.[16]
  • “Direct and indirect effects of Covid-19 on life expectancy and poverty in Indonesia”, Bulletin of Indonesian Economic Studies.[17]

In a video summarising these papers,[18] Dr Gibson estimated that 10,000 times as many years of life will likely be lost by lockdowns in Indonesia relative to the life-years lost due to COVID deaths: “the indirect effects on life expectancy, which operate through lower future income, exceed the direct effects of Covid-19-related deaths by at least five orders of magnitude.” This figure is high because of the expectation that 20 to 25 million people are going to enter poverty due to the COVID lockdowns. In comparison, at minute 25 in his video, Prof. Gibson suggests that with a 7% expected lower GDP due to lockdowns, New Zealanders would have a 1.2 percent lower life expectancy, equivalent to one year of lost life. That is more than 12 times larger than the direct harm to human wellbeing via expected COVID deaths, even if New Zealand had followed “relaxed” policies like Sweden.

  • On 1 March 2021 Dr Sebastian Rushworth, a medical doctor in Sweden, opined that “the number of years of life lost to lockdown is many times greater than the number of years of life lost to covid-19.”[19]
  • On 22 March 2021, an op-ed by John Tierney in the New York Post claimed that lockdowns killed people on net.[20] In his words:

More than two dozen studies have challenged the effectiveness of lockdowns, showing that closing businesses and schools does little or nothing to reduce infections and deaths from the virus.

If a corporation behaved this way, continuing knowingly to sell an unproven drug or medical treatment with fatal side effects, its executives would be facing lawsuits, bankruptcy and criminal charges. But the lockdown proponents are recklessly staying the course, still insisting that lockdowns work.

The burden of proof rests with those imposing such a dangerous policy, and they haven’t met it. There is still no proof that lockdowns save any lives — let alone enough to compensate for the lives they end.

Other CBAs have been produced by Andy Ryan in Ireland[21] and Christian Krekel, Richard Layard, and others[22] in the UK.

The list above does not include some CBAs, such as that penned by Richard Holden and Bruce Preston in The Conversation,[23] which make elementary errors in their approach and therefore would not survive robust scientific review or an independent peer review.

[1] Frijters, Paul (2021). “WELLBYs, cost-benefit analyses and the Easterlin Discount” in Vienna Yearbook of Population Research (Vol.19), pp. 1-26.

[2] Allen, Douglas W. (2021). “Covid-19 Lockdown Cost/Benefits: A Critical Assessment of the Literature” in International Journal of the Economics of Business, 21 September 2021, https://www.tandfonline.com/doi/abs/10.1080/13571516.2021.1976051.

[3] This person bears no relation to my eponymous co-author on The Great Covid Panic.

[4] University of Otago (2020). Why New Zealand needs to continue decisive action to contain coronavirus, 20 March 2020, https://bit.ly/3yUqJ9k.

[5] Lally, Martin (2021). “The Costs and Benefits of Covid-19 Lockdowns in New Zealand” in medRxiv, 27 July 2021, https://doi.org/10.1101/2021.07.15.21260606.

[6] http://youtu.be/dp_4HBRm-8c.

[7] Cowen, Tyler (2020). “Should South Africa lock down?” in Marginal Revolution blog, 7 May 2020, https://bit.ly/3Gd602k.

[8] Pandemics – Data and Analytics (PANDA) (2020). “Quantifying Years of Lost Life in South Africa Due to COVID-19,” 11 May 2020, https://bit.ly/3PuNJBA.

[9] Business Live (2020). “EXCLUSIVE: Lockdown disaster dwarfs Covid-19, say SA actuaries,” 5 May 2020, https://bit.ly/3wCw97k.

[10] Copenhagen Consensus Centre (2020). A rapid cost-benefit analysis of moderate social distancing in response to the COVID-19 pandemic in Ghana, 20 May 2020, https://bit.ly/3MzZ818.

[11] Department of Health and Social Care, Office for National Statistics, Government Actuary’s Department and Home Office (2020). Direct and Indirect Impacts of COVID-19 on Excess Deaths and Morbidity: Executive Summary, 15 July 2020, https://bit.ly/3MGfFAz.

[12] A country-level analysis measuring the impact of government actions, country preparedness and socioeconomic factors on COVID-19 mortality and related health outcomes: https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(20)30208-X/fulltext.

[13] Ben W. Mol, Jonathan Karnon (2020). “Strict lockdown versus flexible social distance strategy for COVID-19 disease: a cost-effectiveness analysis” in medRxiv, https://doi.org/10.1101/2020.09.14.20194605.

[14] Staples, David (2020). “Lockdowns will cause 10 times more harm to human health than COVID-19 itself, says infectious disease expert” in Edmonton Journal, 21 October 2020, https://archive.ph/XyPmt; Joffe, Ari R. (2021). “COVID-19: Rethinking the Lockdown Groupthink” in Frontiers in Public Health, 26 February 2021, https://www.frontiersin.org/articles/10.3389/fpubh.2021.625778/full.

[15] Gibson, John (2020). “Hard, not early: putting the New Zealand Covid-19 response in context” in New Zealand Economic Papers, https://www.tandfonline.com/doi/full/10.1080/00779954.2020.1842796.

[16] Gibson, John (2020). “Government mandated lockdowns do not reduce Covid-19 deaths: implications for evaluating the stringent New Zealand response” in New Zealand Economic Papers, https://www.tandfonline.com/doi/full/10.1080/00779954.2020.1844786.

[17] Gibson, John (2020). “Direct and Indirect Effects of Covid-19 On Life Expectancy and Poverty in Indonesia” in Bulletin of Indonesian Economic Studies, https://www.tandfonline.com/doi/full/10.1080/00074918.2020.1847244.

[18] http://youtu.be/O2JOg4ki_so.

[19] Rushworth, Sebastian (2021). “Lockdowns have killed millions,” 1 March 2021, https://bit.ly/3GdrThY.

[20] Tierney, John (2021). “The data shows lockdowns end more lives than they save” in New York Post, 22 March 2021, https://bit.ly/3G9gYpi.

[21] Ryan, A. (2021). “A Cost–Benefit Analysis of the COVID-19 Lockdown in Ireland,” 10.2139/ssrn.3872861, 16 June 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3872861

[22] Frijters, P., Clark, A. E., Krekel, C., & Layard, R. (2020). “A happy choice: wellbeing as the goal of government” in Behavioural Public Policy, 4(2), 126-165. 10.1017/bpp.2019.39, https://bit.ly/38HRT8U.

[23] Frijters, Paul (2020). “The corona cost-benefit analyses of Richard Holden, Bruce Preston and Neil Bailey: ooops!” in Club Troppo, 18 May 2020, https://bit.ly/3wBvDX6.

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The Gigi Foster Cost Benefit Analysis of Australia’s lockdowns is now available on order as a book

An email I sent out yesterday:

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Dear all

A few weeks ago I’d shared the Exec Summary of the final GigiFoster CBA, which shows that the harms from lockdowns and border closures in Australia have been at least in the order of 68 times the benefits.

Now the full CBA is ready to be ordered – it has been converted into a book published by Connor Court. It is the kind of document that the government would normally produce. But due to the Great Hysteria, all principles of good policy were thrown out of the window in 2020 and we never got a CBA from the government.

While I’m biased towards this particular CBA,  I can confirm that in my entire career as a government economist, I’ve never seen a more comprehensive and thorough CBA. Having said that, there’s obviously a huge opportunity to further refine and improve it, should someone wish to do so.  The governments of Australia have destroyed half a trillion dollars (apart from other harms to life and health). Had they invested in a CBA, they would have achieved a great outcome for Australia at a fraction of that cost. Making policy without a CBA is equivalent to flying a plane without a flight panel.

A few related things

  1. My 2020 book, The Great Hysteria and The Broken State.
  2. Gigi Foster’s 2021 book (along with Paul Fritjers and Michael Baker), The Great Covid Panic.
  3. My 2022 study along with Jason Gavriliswhich conclusively proves that lockdowns increased even covid deaths globally.
  4. My detailed complaint of November 2020 to the International Criminal Court which showed even then how the policies adopted in Australia constitute a crime against humanity. The data on the mass massacres caused by Australia’s policies is out in the open. Further, across the world millions of additional deaths have occurred due to lockdowns. Surely someday this will be recognised as a crime against humanity.  This chart from ABS shows how severe the additional deaths are in Australia itself. Almost all the 10,000 odd people whose lives were saved in 2020 and 2021 by intense border closures, have died in 2022 from covid. Plus vast numbers of additional non-COVID deaths (the CBA contains a deeper analysis of ABS data to show how the excess deaths of Australia are an under-count).
  5. Dan Andrews and his Liberal understudy Matthew Guy have failed to respond to my challenge to prove their blatantly false claims about covid being in the league of Spanish flu. I offered them 11k. Sky Newsasked these pollies to go ahead and prove it. None have done so. They can’t! They have lied at every step over the past 2.5 years. I’ve taken this message (of the lying politicians) to the people of Bulleen through flyers, walking myself over 500 km in 100 days and spending around $40,000 from my pocket to raise awareness of these lies. My candidate page contains the DL flyers that I’ve been distributing (and paying Australia Post to distribute). I was working only 0.6 FTE when I resigned in September 2020 to fight public health tyranny. My opportunity cost will be well over $200 by end-2022 from lost wages. If we add my expenses to educate the people, I’d have spent around $250k by end-2022 to fight public health tyranny. So if you have any capacity to do so, please chip in to support my work to wake up the people.
  6. Finally, I’d love to support a CBA of lockdowns in India where even more devastation has been caused by Narendra Modi than by Australia’s politicians. Unfortunately, in India not a single economist/policy maker has ever heard about a CBA. I keep raising this issue repeatedly, but they’ve never heard of it – the purest form of a banana republic. I’m sharing this email with some Indians so they might finally wake up one day and undertake a CBA.

Regards

Sanjeev Sabhlok

 

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Brett Sutton’s advice (15 March 2020 and 11 September 2020) to the Minister for Health recommending a Declaration of the State of Emergency

I had reason to try to locate Brett Sutton’s 15 March 2020 advice. Unfortunately, it is not readily available via google.

But I had extracted and uploaded it here, and his 11 September 2020 advice here. So bringing these two crucial pieces of evidence together, here.

DIRECT LINKS TO PDF FILES

15 March 2020 advice

11 September 2020 advice

 

KEYWORDS

CHIEF HEALTH OFFICER VICTORIA,  Advice relating to Declaration of State of Emergency, Advice relating to Declaration of Extension to State of Emergency

 

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