scholarly journals The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19

2020 ◽  
Vol 11 (2) ◽  
pp. 179-195 ◽  
Author(s):  
Linda Thunström ◽  
Stephen C. Newbold ◽  
David Finnoff ◽  
Madison Ashworth ◽  
Jason F. Shogren
Keyword(s):  
Economic Activity ◽  
Critical Parameters ◽  
Social Distancing ◽  
Benefit Cost Analysis ◽  
Statistical Life ◽  
Unknown Factor ◽  
Net Benefits ◽  
Benefit Cost ◽  
Benefits And Costs

AbstractWe examine the net benefits of social distancing to slow the spread of COVID-19 in USA. Social distancing saves lives but imposes large costs on society due to reduced economic activity. We use epidemiological and economic forecasting to perform a rapid benefit–cost analysis of controlling the COVID-19 outbreak. Assuming that social distancing measures can substantially reduce contacts among individuals, we find net benefits of about $5.2 trillion in our benchmark case. We examine the magnitude of the critical parameters that might imply negative net benefits, including the value of statistical life and the discount rate. A key unknown factor is the speed of economic recovery with and without social distancing measures in place. A series of robustness checks also highlight the key role of the value of mortality risk reductions and discounting in the analysis and point to a need for effective economic stimulus when the outbreak has passed.

Accounting for the Distribution of Benefits and Costs in Benefit–Cost Analysis

2020 ◽  
pp. 1-21
Author(s):  
James K. Hammitt
Keyword(s):  
Cost Analysis ◽  
Decision Makers ◽  
Policy Choice ◽  
Alternative Evaluation ◽  
Benefit Cost Analysis ◽  
Transfer Programs ◽  
Net Benefits ◽  
Benefit Cost ◽  
Benefits And Costs

Abstract Benefit–cost analysis (BCA) is often viewed as measuring the efficiency of a policy independent of the distribution of its consequences. The role of distributional effects on policy choice is disputed; either: (a) the policy that maximizes net benefits should be selected and distributional concerns should be addressed through other measures, such as tax and transfer programs or (b) BCA should be supplemented with distributional analysis and decision-makers should weigh efficiency and distribution in policy choice. The separation of efficiency and distribution is misleading. The measure of efficiency depends on the numéraire chosen for the analysis, whether monetary values or some other good (unless individuals have the same rates of substitution between them). The choice of numéraire is not neutral; it can affect the ranking of policies by calculated net benefits. Alternative evaluation methods, such as BCA using a different numéraire, weighted BCA, or a social welfare function (SWF), may better integrate concerns about distribution and efficiency. The most appropriate numéraire, distributional weights, or SWFs cannot be measured or statistically estimated; it is a normative choice.

Adding Value with Benefit-Cost Analysis: Forecasting Net Social Benefit from Impacts of Slot Machine Gambling in Maryland

2015 ◽  
Vol 6 (2) ◽  
pp. 281-304
Author(s):  
Scott Farrow
Keyword(s):  
Impact Analysis ◽  
Social Benefit ◽  
Slot Machines ◽  
Benefit Cost Analysis ◽  
Net Benefits ◽  
Benefit Cost ◽  
Benefits And Costs ◽  
Machine Gambling ◽  
Distributional Impacts

The estimated impacts, benefits, and costs of legalizing slot machines in Maryland are analyzed building on and contrasting with results from an impact analysis. The analysis provides estimates of the components and the total net benefits to the state and its citizens; the role of uncertainty, distributional impacts, and a basic tax alternative. The results forecast mostly positive net benefits for Maryland both in comparison to doing nothing and in comparison to raising an equivalent amount in taxes. However, if slot revenue raised from the lower income population is given more weight, then doing nothing or raising taxes appears to be preferred.

scholarly journals Appropriate Discounting for Benefit-Cost Analysis

2011 ◽  
Vol 2 (2) ◽  
pp. 1-20 ◽  
Author(s):  
David F. Burgess ◽  
Richard O. Zerbe
Keyword(s):  
Cost Analysis ◽  
Discount Rate ◽  
Cost Of Capital ◽  
Hyperbolic Discounting ◽  
Ease Of Use ◽  
Benefit Cost Analysis ◽  
The Social ◽  
Net Benefits ◽  
Benefit Cost

In order to be sensible about what discount rate to use one must be clear about its purpose. We suggest that its purpose is to help select those projects that will contribute more net benefits than some other discount rate. This approach, which is after all the foundation for benefit-cost analysis, helps to reconcile different suggested procedures for determining the discount rate. We suggest that the social opportunity cost of capital (SOC) is superior to other suggested approaches in its generality and its ease of use. We use the SOC to determine a range of real rates that vary between 6% and 8%. We suggest that approaches based on determination of preferences, which result in hyperbolic discounting, are less appropriate and less useful.

scholarly journals The role of value added in benefit/cost analysis

1991 ◽  
Vol 25 (2) ◽  
pp. 145-149 ◽  
Author(s):  
Stephen C. Cooke
Keyword(s):  
Cost Analysis ◽  
Value Added ◽  
Benefit Cost Analysis ◽  
Benefit Cost

scholarly journals Comparing the Application of CEA and BCA to Tuberculosis Control Interventions in South Africa

2019 ◽  
Vol 10 (S1) ◽  
pp. 132-153 ◽  
Author(s):  
Thomas Wilkinson ◽  
Fiammetta Bozzani ◽  
Anna Vassall ◽  
Michelle Remme ◽  
Edina Sinanovic
Keyword(s):  
South Africa ◽  
South African ◽  
Methodological Approach ◽  
Value Of Statistical Life ◽  
Policy Recommendations ◽  
Benefit Cost Analysis ◽  
Tb Control ◽  
Statistical Life ◽  
Benefit Cost ◽  
The Impact

Achieving ambitious targets to address the global tuberculosis (TB) epidemic requires consideration of the impact of competing interventions for improved identification of patients with TB. Cost-effectiveness analysis (CEA) and benefit-cost analysis (BCA) are two approaches to economic evaluation that assess the costs and effects of competing alternatives. However, the differing theoretical basis and methodological approach to CEA and BCA is likely to result in alternative analytical outputs and potentially different policy interpretations. A BCA was conducted by converting an existing CEA on various combinations of TB control interventions in South Africa using a benefits transfer approach to estimate the value of statistical life (VSL) and value of statistical life year (VSLY). All combinations of interventions reduced untreated active disease compared to current TB control, reducing deaths by between 5,000 and 75,000 and resulting in net benefits of Int$3.2–Int$137 billion (ZAR18.1 billion to ZAR764 billion) over a 20-year period. This analysis contributes to development and application of BCA methods for health interventions and demonstrates that further investment in TB control in South Africa is expected to yield significant benefits. Further work is required to guide the appropriate analytical approach, interpretation and policy recommendations in the South African policy perspective and context.

Who Gains from and who Pays for Channel Deepening?

2005 ◽  
Vol 1909 (1) ◽  
pp. 62-69 ◽  
Author(s):  
Thomas A. Grigalunas ◽  
James J. Opaluch ◽  
Young Tae Chang
Keyword(s):  
Net Present Value ◽  
Cost Savings ◽  
Economic Benefits ◽  
The State ◽  
Sensitivity Analyses ◽  
Cost Ratio ◽  
Benefit Cost Ratio ◽  
Net Benefits ◽  
Benefit Cost ◽  
Benefits And Costs

Port dredging to accommodate larger vessels can create substantial national economic benefits. However, how affected individual states fare economically with dredging is often unclear and can be an important issue. The benefits and the costs to Delaware residents of dredging—with the recent proposed deepening of the Delaware Bay and River main federal channel as a case study—are examined. Benefits include ( a) lower transportation costs that residents might receive on imported goods, ( b) profits that residents would realize if cost savings (e.g., on refinery products) were not passed forward to Delaware users, ( c) project costs that residents would bear as federal taxpayers, and ( d) benefits that residents would realize if the use of dredged sediments for planned beach renourishment created savings to the state. Sensitivity analyses are used to reflect uncertainty in outcomes. The estimated net present value to Delaware today of all future annual quantifiable benefits and costs ranges between $15,528,393 and $14,195,700 over 50 years at 5.875%. Stated another way, the quantified net benefits for Delaware imply a benefit-cost ratio between 2.07 and 1.89. Hence, for every dollar of the $7.5 million that Delaware would pay as a nonfederal cosponsor, estimated quantifiable net benefits to the state are $2.07 to $1.89. Some benefit and cost estimates are vehemently debated between interested parties, and not all benefits and costs can be quantified.

scholarly journals Benefit–Cost Analysis of an Innovative Program for Self-Sufficiency and Homeownership

2019 ◽  
Vol 43 (1-2) ◽  
pp. 3-40
Author(s):  
George C. Galster ◽  
Anna Maria Santiago ◽  
Richard J. Smith ◽  
Joffre Leroux
Keyword(s):  
Cost Analysis ◽  
Home Ownership ◽  
Social Benefit ◽  
Model Specification ◽  
Parameter Estimates ◽  
Housing Subsidy ◽  
Benefit Cost Analysis ◽  
Quasi Experimental ◽  
Net Benefits ◽  
Benefit Cost

Background: Federal policy has increasingly sought to build financial capability, earnings, and assets of subsidized housing recipients. Objective: We conduct a benefit–cost analysis of the Denver Housing Authority’s (DHA) innovative Home Ownership Program (HOP), which incentivizes participants to increase earnings, build wealth, and purchase homes. Research design, subjects, and measures: In assessing HOP participant benefits (earnings, home-buying, and positive exits from DHA), we use parameter estimates from quasi-experimental methods (i.e., propensity score matching) that permit drawing causal inferences of program impacts. Impact estimates are robust to alternate model specification and mostly insensitive to omitted variable bias found in the social sciences. We deploy a comprehensive accounting framework, distinguishing benefits and costs accruing to program participants, nonparticipants (other citizens, taxpayers, and governments), and society as a whole. We use Monte Carlo simulation techniques to approximate distributions of benefit and cost parameters, thereby ascertaining how reliably participation in HOP yielded net benefits compared to if families had continued to receive housing assistance during the same period. Results: We estimate a net social benefit from HOP of US$6,015 per participant. The simulated standard deviation was only a third of this value and 99.9% of simulations returned positive net social benefits. Conclusion: We conclude with a high degree of statistical confidence that HOP produced substantial net benefits to society as a whole, program participants, and nonparticipants alike. HOP offers strong potential for poverty alleviation among housing subsidy recipients and should be replicated.

scholarly journals Valuing Mortality Risk Reductions in Global Benefit-Cost Analysis

2019 ◽  
Vol 10 (S1) ◽  
pp. 15-50 ◽  
Author(s):  
Lisa A. Robinson ◽  
James K. Hammitt ◽  
Lucy O’Keeffe
Keyword(s):  
Mortality Risk ◽  
Income Elasticity ◽  
Lower Income ◽  
Middle Income ◽  
Income Differences ◽  
Benefit Cost Analysis ◽  
Middle Income Countries ◽  
Statistical Life ◽  
The Past ◽  
Benefit Cost

The estimates used to value mortality risk reductions are a major determinant of the benefits of many public health and environmental policies. These estimates (typically expressed as the value per statistical life, VSL) describe the willingness of those affected by a policy to exchange their own income for the risk reductions they experience. While these values are relatively well studied in high-income countries, less is known about the values held by lower-income populations. We identify 26 studies conducted in the 172 countries considered low- or middle-income in any of the past 20 years; several have significant limitations. Thus there are few or no direct estimates of VSL for most such countries. Instead, analysts typically extrapolate values from wealthier countries, adjusting only for income differences. This extrapolation requires selecting a base value and an income elasticity that summarizes the rate at which VSL changes with income. Because any such approach depends on assumptions of uncertain validity, we recommend that analysts conduct a standardized sensitivity analysis to assess the extent to which their conclusions change depending on these estimates. In the longer term, more research on the value of mortality risk reductions in low- and middle-income countries is essential.

scholarly journals A retrospective assessment of the costs of EPA’s 1998 Locomotive Emission Standards

2014 ◽  
Vol 5 (2) ◽  
pp. 285-314 ◽  
Author(s):  
Elizabeth Kopits
Keyword(s):  
Cost Analysis ◽  
Total Cost ◽  
Benefit Cost Analysis ◽  
Retrospective Assessment ◽  
Emission Standards ◽  
Ex Post ◽  
Data Limitations ◽  
The Cost ◽  
Benefit Cost ◽  
Benefits And Costs

Abstract:While the need to update EPA benefit-cost analysis to reflect the most recent science is broadly acknowledged, little work has been done examining how well ex ante BCAs estimate the actual benefits and costs of regulations. This paper adds to the existing literature on ex post cost analyses by examining EPA’s analysis of the 1998 Locomotive Emission Standards. Due to data limitations and minimal ability to construct a reasonable counterfactual for each component of the cost analysis, the assessment relies mainly on industry expert opinion, augmented with ex post information from publicly available data sources when possible. The paper finds that the total cost of bringing line-haul locomotives into compliance with the 1998 Locomotive Emission Standards rule remains uncertain. Even though the initial per-unit locomotive compliance costs were higher than predicted by EPA, total costs also depend on the number of locomotives affected by the regulation. Over 2000–2009, the number of newly built line-haul locomotives was higher but the number of remanufactured line-haul locomotives was lower than EPA’s estimate.

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