Lockdowns' High Costs and Murky Benefits

Cato economist Ryan Bourne's new book is a much-needed rejoinder to the obtuse economic reasoning of many pandemic-era policy makers.


"We're not going to put a dollar figure on human life," Andrew Cuomo, a Democrat who was then New York's governor, declared four days after he imposed a statewide COVID-19 lockdown last year. The goal, he explained, was to "save lives, period, whatever it costs."

Ryan Bourne's Economics in One Virus offers a much-needed rejoinder to that morally obtuse position. Bourne, an economist at the Cato Institute, highlights considerations that politicians like Cuomo too often ignored as they decided how to deal with a public health crisis more serious than any the country had faced since the influenza pandemic of 1918. Eschewing unwarranted confidence, Bourne takes no firm position on the cost-effectiveness of mass business closures or stay-at-home orders. But he does insist, pace Cuomo, that cost-effectiveness matters, and he deftly shows how economic reasoning illuminates such issues.

If legislators were determined to "save lives, period, whatever it costs," they would set the speed limit at 5 miles per hour, or perhaps ban automobiles altogether, which would prevent nearly 40,000 traffic-related deaths every year. Those policies seem reasonable only if you ignore the countervailing costs. In public policy, economist Thomas Sowell famously observed, there are no solutions; there are only tradeoffs.

"Logically," Bourne writes, "there must be some negative consequences of government lockdowns, and some point at which they might become self-defeating." To figure out when that might be, policy makers needed to estimate the public health payoff from lockdowns and compare it to the harm they caused.

Contrary to Cuomo's framing of the issue, this is not a matter of weighing "the economic cost" of maintaining lockdowns against "the human cost" of lifting them, as if those categories were mutually exclusive. Even in life-and-death terms, lockdowns had a downside, since they plausibly contributed to a spike in drug-related deaths, discouraged potentially lifesaving medical care, and inflicted financial and psychological distress, neither of which is good for your health. And as Bourne emphasizes, "economic welfare" goes beyond household finances or GDP, encompassing everything people value.

Bourne reviews the literature on the benefits of lockdowns, making several important analytical points. If we want to know whether lockdowns "worked," for example, we need to distinguish between the impact of government-imposed restrictions and the impact of voluntary precautions. An early, highly influential projection by researchers at Imperial College London, which was amplified by the Trump administration, envisioned as many as 2.2 million COVID-19 deaths in the United States based on a counterfactual scenario where "we do nothing." But doing nothing was never a realistic option; by then, people already were responding to the pandemic by changing their behavior.

In addition to all the voluntary cancellations of large gatherings such as conventions and sporting events, smartphone mobility data show that individual excursions fell sharply in early March, weeks before most of the lockdowns. One study that Bourne cites, by economists Christopher Cronin and William Evans, estimated that "non-regulatory responses by individuals and businesses" accounted for "between 74 and 83 percent" of the drop in visits to retailers, entertainment venues, hotels, restaurants, and service businesses. Economists Austan Goolsbee and Chad Syverson found that "legal restrictions" were responsible for less than 12 percent of the decline in "overall consumer traffic."

Since "extensive social distancing was happening prior to government orders," Bourne writes, "it would be wrong to suggest all lives saved compared to 'doing nothing' can be attributed to government policies." He suggests that voluntary adaptation "might explain why cases and deaths across countries implementing very different public health interventions nevertheless followed fairly consistent patterns through much of the spring and summer of 2020."

The importance of private precautions cuts both ways in assessing the cost-effectiveness of lockdowns. It reduces the benefits of such policies, but it also reduces their costs. Since Americans spooked by COVID-19 responded by staying at home more and spending less time and money at brick-and-mortar businesses, those businesses and their employees would have suffered (although not as much) even if states had not restricted their operations or shut them down completely. "It is clear that businesses and much economic activity were shuttering or constrained through changed private behaviors," Bourne notes, "even prior to state-government-mandated business closures and stay-at-home orders."

A proper analysis of lockdowns also has to distinguish between COVID-19 deaths that were prevented and COVID-19 deaths that were merely delayed. While conventional wisdom suggests that lockdowns were most effective at reducing virus transmission early in the pandemic, their impact on mortality was at least potentially bigger later on, when better treatment and vaccines were already available or around the corner. Then again, relatively strict states such as California, which experienced the same winter surge in cases and deaths as states that were frequently criticized as lax, did not see any obvious public health benefit from reimposing restrictions in late 2020.

A couple of natural experiments indicated that lifting lockdowns did not have anything like the disastrous impact that critics predicted. After the Wisconsin Supreme Court overturned that state's lockdown in May 2020, economist Dhaval Dave and his colleagues found, the decision "had little impact on social distancing," and there was "no evidence" one month later that it "impacted COVID-19 growth." (Wisconsin, like the rest of the country, did see a modest increase in new cases later that summer, followed by a surge in the fall and winter.) And while Texas Gov. Greg Abbott, a Republican, was widely condemned for lifting business occupancy limits and a statewide face mask mandate in early March 2021, Dave et al. likewise found "no evidence" that the reopening affected cases or deaths.

Here, too, the lesson is not obvious. As Dave pointed out, removing legal restrictions may have had a smaller impact than imposing them if people tended to stick with cautious habits they adopted during lockdowns.

Several studies that Bourne discusses estimate that U.S. lockdowns had a substantial additional effect on cases and deaths, beyond what was already being accomplished through voluntary changes. Here is how he summarizes a study by a team of Penn-Wharton economists: "Although the private responses did most of the heavy lifting, the combined impact of state stay-at-home orders, school closings, and nonessential business closures across the United States reduced deaths by 48,000 in the first three months of the pandemic." By contrast, a subsequent study by researchers at the University of Chicago, published after Bourne's book, concluded that lockdowns during that period "did not produce large health benefits but also accounted for a small share of pandemic-related economic disruptions."

Assuming that estimates of large effects are credible, there is still the issue of what price was worth paying to avoid those deaths. Cuomo, who asserted that "a human life is priceless" even as he pursued a reckless nursing home policy that probably caused many avoidable deaths, thought even asking that question was a moral affront. But in a world of finite resources where officials routinely and appropriately weigh the cost of lifesaving regulations, the question is unavoidable.

Regulators commonly assume a policy is justified if it costs around $10 million for each death it is expected to prevent. That "value of a statistical life" (VSL) is derived from research on how much extra pay people demand for hazardous work, which involves a relatively young and healthy population. As Bourne notes, this VSL implies that "we should be willing to effectively sacrifice up to 10 percent of all U.S. wealth" (which is roughly five times America's GDP) to "save the lives of just 0.33 percent of the population." But given the age distribution of COVID-19 deaths, which were overwhelmingly concentrated among elderly people with preexisting health conditions, some economists think the VSL in this context should be closer to $3 million, which obviously would make a big difference in estimating the impact of lockdowns.

Fully considered, Bourne thinks, both the costs and the benefits of lockdowns may have run into the trillions of dollars. Even if the latter sum was higher, that does not necessarily mean lockdowns were the best approach, since less sweeping, more carefully targeted policies might have achieved similar results at a lower cost, as several international surveys of COVID-19 control measures have suggested. Bourne does not venture a definitive conclusion.

In addition to considering the merits of lockdowns, Bourne uses the pandemic to illustrate economic concepts such as externalities (the justification for government intervention in this case), marginal analysis (which politicians too rarely applied in judging the wisdom of restricting low-risk activities such as boating and fishing), the price mechanism (which policy makers keen to stamp out "price gouging" tended to ignore), moral hazard (which suggests that some COVID-19 precautions might have counterintuitively encouraged risky behavior), and public choice (which helps explain which businesses got bailouts). Bourne's focus throughout is on smart questions rather than glib answers—an approach frequently missing in the pandemic era's acrimonious debates.

Economics in One Virus: An Introduction to Economic Reasoning Through COVID-19, by Ryan A. Bourne, Cato Institute, 309 pages, $19.95

NEXT: How the Government Seized a Rare Wu-Tang Clan Album (and a DAO Bought It Back)

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  1. The costs are imposed on the individual, not the government, so Cuomo is correct to say he doesn't give a shit how much it costs, if it saves one life it's worth it no matter how much it costs.

    1. > The goal, he explained, was to "save lives, period, whatever it costs."

      "Even if that cost is children committing suicide. Because those lives don't count, because they're contradictory to the narrative. And it won't be *my* family suffering, because the rules don't apply to me anyway."

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    2. And the lives he contributed to ending don't count at all apparently.

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    4. If it saves one life it's worth it

      Didn't that guy kill a couple thousand people to save that one life?

  2. The benefit is control.
    The ones making the decisions have not been and currently are not paying the costs.

    1. Disaffected, antisocial, irrelevant clingers are among my favorite culture war casualties.

      1. It is great. Folks are removing themselves from the broken system leaving fewer to be affected by it. And they go on to great things.

        1. "Lockdowns' High Costs and Murky Benefits..."


          It is NOT such a "murky" benefit, when it allows the politicians to take over the entire...

          ...Murky Way Galaxy! They will murk it for all that it is worth!

  3. Well, lock downs didn't mitigate C19 mortality so there's that.

    1. yeah, even the lockdown fanatics who would do it all the same way again don't seem to understand that the lockdowns didn't even work.

      1. All they did was add lockdown deaths to the inevitable covid deaths.

  4. Fauci belongs in jail.

    1. In a cell with Cuomo?

      1. They could get a whole ward and put them in with Whitmer, Newsom, and Hillary, among others. Locally, I would add Sam Page and his toady interim health department director Faisal Khan.

        1. You’re going to upset sarc with all
          this criticism of the holy Democratic Party.

    2. How 'bout on display naked in a cage at the National Zoo?

  5. Who could have seen this coming? Totally shocking.

  6. The unscientific lockdowns (which were based on an international virus emergency plan funded by Gates and Bloomberg) destroyed or devastated tens/hundreds of thousands of small mom n pop and independent businesses (mostly owned by Republicans), while enriching Big Tech and Big Box retailers (mostly owned by Democrats).

    The lockdowns were colluded to and jointly imposed (followed by unscientific mask mandates) by Democrat governors in NY, PA, NJ, CT, RI and MI as their strategy to defeat Trump in Nov 2020 (by blaming him for all the harm caused by their lockdowns and the Fauci financed China virus pandemic).

    1. And of course, the Democrat imposed lockdowns allowed tens of millions of government employees (the overwhelming majority of whom vote Democrat) to continue getting paid while taking off work for many months (so they could campaign for Biden and against Trump).

      1. They all should have been furloughed.

        1. But then they just go on unemployment (enhanced by federal dollars.)

          1. So be it. Adjust state income taxes down since general fund positions were not producing. Let UI go in the red or cease.

    2. Don't forget Republican governor Dewine.

  7. The cost of the lockdowns, while certainly not greater than the cost of the lives lost to the pandemic, is likely far higher than the value of the lives saved by the lockdowns, since the lockdowns were mostly ineffective. Countries and states and cities with various lockdown policies from restrictive to permissive had very similar pandemic outcomes.

    Murder rates were up, traffic fatality rates were up (even as people drove less), people died from avoiding needed medical care for other conditions, hundreds of millions of people experienced dangerous and unhealthy weight gain, avoided fresh air and sunshine and exercise, and experienced greatly increased loneliness, depression and anxiety (especially if they watched the TV news).

    And that's on top of the entirely self-inflicted economic harm from the lockdowns, leading to failed businesses, unemployment, and despair, which increases suicide, alcoholism and drug dependency. And then governments added to the economic harm with inflationary debt to "stimulate" the economy they had drugged.

    1. The lockdowns achieved the chief goal of the Democrats who imposed them (first for two weeks, then two months and then through the fall), which was to defeat Trump.

      The lockdowns were never intended to benefit public health, but that's the narrative Fauci, CDC, left wing Democrats and their left wing media propagandists continue to peddle (to maintain control).

      1. And it worked so good they’re doing it again in Virginia.

  8. Can we now expect AG Garland to apologize to Americans for colluding with the NSBA, intimidating and threatening parents (and other taxpayers) with prosecution for criticizing outrageous school board policies?

    1. Note that Biden's administration has a policy to never apologize for (nor even acknowledge) any disastrous policies endorsed or imposed by Biden, Schumer, Pelosi and other woke Democrats.

  9. Finally. An economic approach that is both 'libertarian' and able to include the messy complexities of having to deal with the real world.

    An approach which is undermined by both just-the-flu denialism and the view of governance advocated by the useful idiot wing of DeRpy partisanship.

    1. Derpy is your middle name.

  10. Lockdowns' unconstitutional basis and flagrant disregard of human rights.

    1. Exactly.....what is missing from all these economists' studies (who of course have tenure and personal professional success as their #1 goal in life) is something that cannot be quantified: the value of human freedom.

      People have become so lost in today's consumer materialism-worshipping society, most have lost the ability to form values and morals - to live their lives dedicated to certain ideals. "I'd rather die on my feet than live on my knees". Freedom isn't something you calculate on some insurance liability spreadsheet. It's the prerequisite for a healthy, satisfying life.

  11. We all know that the lockdowners don't care about cost/benefit. They only care about fear and about case numbers on spreadsheets.

    1. They don't care about case #'s either. That's been proven multiples of times.

  12. Sullum is definitely not jizz strudle.

  13. You all keep making the same mistakes in judging how activists make decisions, by trying to connect and compare benefits and costs. In the progressive mind, these are completely unrelated, and often considered only as benefits--no costs considered.

    Besides, when people make decisions strictly based on emotions and feelz, plus the urge to DO SOMETHING, the concept of cost-benefits analysis might as well be string theory.

  14. Sullum spent an inordinate amount of copy whining about Trump's mean tweets. Maybe WE got what the asshole Sullum deserved.

    1. Exactly.

      Thanks for not seeing any of this coming last year, reason. The fentanyl zombies of philaehave more foresight than any of your staff.

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  16. Shit, leftists get mad at the very suggestion that lockdowns have costs. To them, nothing the government does has a cost; it's benefits all the way down!

  17. All the draconian lockdown policies put in place over the past year and a half will cost far more in man days lost than were saved. And this is disregarding the added misery of massive losses in economic prosperity, societal stability and freedom. COVID by every dataset out there is not a statistically major threat to all but those who are already elderly and sickly. Namely, people who will likely die soon anyway. It's sad when an 80+ year old with cancer dies at 80 instead of 81, but all that it is is accelerating the inevitable and not by that much. The long term effects of how much poorer we are, how much less free we know are, the god awful precedents set for government power, the number of small businesses that were destroyed, how we self inflicted high inflation and huge not so temporary supply chain disruptions, how many new drug addicts and drunks were created, how much fatter society is now thanks to lockdowns, how many bankruptcies were created, how many people now have depression and other psychological problems, how much higher crime is now, etc.... All of those factors will quite significantly reduce the lifespans of the average American. Not just reduce the lifespan of those that were close to death before the pandemic. And again, this doesn't even factor in the very important quality of life that has been reduced as well. Lockdowns were the worst overreaction and complete failure to perform a cost/benefit analysis in the history of the world and we will be paying the price for decades.

  18. As much as I like Reason and my favorite writers like Sullum and Tucille, this shows that Reason can still dish out propaganda with the best of them:

    >>highlights considerations that politicians like Cuomo too often ignored as they decided how to deal with a public health crisis more serious than any the country had faced since the influenza pandemic of 1918.

    The "most serious public health crisis since 1918".....except of course for the cancer, diabetes, heart disease, and autism/neurological disease epidemics. Which all kill more people per year than Covid at its high water mark. And also, all of which America has far worse than most countries around the world.

  19. Science provides numbers, nothing more.

    How those numbers are considered and applied is politics.

    When politicians tell us "the science is settled", they indicate a complete lack of understanding of the limits of science, and dangers of their profession (by dangers, I mean that if they guess wrong, they are more likely to be out of work after the next election).

    "Saving lives, whatever the cost" is why we have the Patriot Act, amongst an encyclopedia of other ill-conceived laws (and agencies to enforce them).

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