Thread by @CzypionkaThomas

The most common fallacy in health economics and Covid-19 (thread)
Journalists and the public have detected that there is no consensus about #Covid-19 politics among scientists. Indeed there seems to be a division regarding the use of NPIs to curb the pandemic. (1)

I think that part of the divide can be explained by a very common fallacy in (health) economics. It is true that many people that die from Covid-19 had a limited life expectancy even before contracting the virus. Thus, when contrasting the side-effects of NPIs, one could argue(2)

that the benefits do not outweigh the costs. NPIs lead to collateral damage in the healthcare system, they endanger the livelihood as well as education of many people, thus increasing inequality and poverty, they lead to increased anxiety, domestic violence etc. etc. (3)

Now the fallacy: At the heart of economic theory lies the principle that decisions should be made based on the ratio between costs and benefits. And these benefits are often individual or societal “utility”, (4)

i.e. the value that we assign to something, not an objective, measurable property. Notwithstanding, in many an economic analysis we find that accounting for benefits is limited to countable and easily measurable items, such as reduced costs or life years gained. (5)

Of course, this is easier to measure, and as economists frequently do just that, they seem to forget about the core economic principles. (6)

One example to make this point clearer is the moon landing. It was ridiculously expensive (costs) and the only thing that happened was that we sent three people there and two stepped on a lifeless rocky object. Was this cost-effective? (7)

If we just account for the money paid and the monetary return, it was a colossal bust! (8)

But was it really a colossal failure? No, because the fact that in the middle of the cold war people could demonstrate that humankind can achieve the impossible and outgrow its natural limits was of immeasurable value for millions of people then and for generations to come. (9)

What has this to do with Covid-19? Now, we can of course say that most people dying of the disease had only a couple of years left but we lose large chunks of GDP and no doubt a lot of quality of life for the moment. (10)

But let’s say we let the disease run its course. ICUs just don’t admit people over 75 with Covid-19. Instead, everyone else can live their lives again. What would this mean for our societies, letting people die in the tens of thousands, without treatment, suffocating at home?(11)

This would be an anti-moon-landing moment in history! The damage to humankind’s self-conception would be irreparable, and would have dark long-term social consequences. (12)

We need to account for such value that is hard to measure but is definitely there, while minimizing the hardships to people negatively affected by NPIs. Thus, both sides of the cost-benefit ratio of fighting the pandemic shine in a new light. (13)

Sidenote: It is easy for such experts to say that curbing the pandemic is not worthwhile, knowing that politicians would not actually follow their advice and deaths are theoretical.