Determining the Optimal Duration of the COVID-19 Suppression Policy: A Cost-Benefit Analysis

Abstract

Without any intervention, the novel coronavirus would cost the U.S. economy over $9 trillion. A suppression policy aims to reduce the number of new cases through strict social distancing measures by closing schools and non-essential businesses. Less restrictive, a mitigation policy aims to merely slow the growth in new cases by limiting close interactions and isolating contagious individuals. Assuming that the suppression phase will be replaced by the mitigation phase until a vaccine availability, we find that the optimal duration of the suppression phase is shorter the higher its economic cost and the more effectively both phases reduce virus transmission. Finally, the often proposed on-off suppression policy is less economically efficient than a continuous suppression regime imposed at the beginning of an outbreak.

Keywords: COVID-19, Pandemic Curve, Attack Rate, Cost-Benefit Analysis, Non-Pharmaceutical Interventions, Public Health Policy, Suppression, Mitigation, Lockdown

JEL Classification: I10, I18