Scandinavian Working Papers in Economics
Working Papers,
Lund University, Department of Economics
No 2020:9: The Individual Welfare Costs of Stay-At-Home Policies
Ola Andersson (), Pol Campos-Mercade (), Fredrik Carlsson (), Florian Schneider () and Erik Wengström ()
Additional contact information
Ola Andersson: Department of Economics, Uppsala University, Postal: Sweden
Pol Campos-Mercade: Department of Economics, Copenhagen University, Postal: Denmark
Fredrik Carlsson: Department of Economics, University of Gothenburg, Postal: Sweden
Florian Schneider: Department of Economics, University of Zurich, Postal: Switzerland
Erik Wengström: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
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 Sweden'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.
Keywords: Stay-at-home orders; welfare effects; choice experiment
43 pages, May 25, 2020
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