The Individual Welfare Costs of Stay at Home Policies

Abstract

This paper reports the results of a choice experiment designed to estimate the private welfare costs of stay-at-home policies during the COVID-19 pandemic. The study is conducted on a large and representative sample of the Swedish population. The results suggest that the welfare cost of a one-month stay-at-home policy, restricting non-working hours away from home, amounts to 9.1 percent of qSweden's monthly GDP. The cost can be interpreted as 29,600 quality-adjusted life years (QALYs), which roughly corresponds to between 3,700 and 8,000 COVID-19 fatalities. Moreover, we find that stricter and longer lockdowns are disproportionately more costly than more lenient ones. This result indicates that strict stay-at-home policies are likely to be cost-effective only if they slow the spread of the disease much more than more lenient ones.

Welfare costs of travel reductions within the United States due to COVID‐19

“…The results in Figures 2 are further summarized in Table 1 in percentage terms for 19 April 2020, when welfare changes were the most. As is evident, the cumulative welfare loss for the median or the average US county has been about 11 % as of 19 April 2020, which is in line with other studies such as by Andersson et al (2020) who have shown that welfare cost of a stay‐at‐home policy is about 9 % for Sweden.…”

Welfare costs of COVID‐19: Evidence from US counties

“…The corresponding model implications suggest evidence for about 11% of an average (across days) reduction of welfare during the sample period between February and December 2020 for the average US county. These welfare costs are in line with other studies such as by Andersson et al (2020) who have shown that welfare cost of a stay‐at‐home policy is about for Sweden, although that paper uses a survey experiment approach different from this paper.…”

Stay-at-home orders and the willingness to stay home during the COVID-19 pandemic: A stated-preference discrete choice experiment

“…While [16] have evaluated individuals' willingness-to-accept (WTA) to stay home in Sweden, we examine people's WTS in the United States. We show that individuals are willing to stay home for additional five and half weeks to lower the increase in new cases by 100%.…”

“…However, these studies impose assumptions on individuals' willingness to stay (WTS) at home. Only a few studies have examined how the general public values the costs and benefits of these policies [16,17]. To better understand individuals' willingness to comply with SAH orders, we need to examine their preferences regarding the length of potential lockdowns.…”