Working Paper: NBER ID: w27340
Authors: Robert E. Hall; Charles I. Jones; Peter J. Klenow
Abstract: This note develops a framework for thinking about the following question: What is the maximum amount of consumption that a utilitarian welfare function would be willing to trade off to avoid the deaths associated with the pandemic? The answer depends crucially on the mortality rate associated with the coronavirus. If the mortality rate averages 0.81%, taken from the Imperial College London study, our answer is 41% of one year's consumption. If the mortality rate instead averages 0.44% across age groups, our answer is 28%.
Keywords: COVID-19; consumption; mortality; utilitarian welfare
JEL Codes: E0; I10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mortality rate (J11) | consumption sacrifice (E21) |
| mortality rate (J11) | value of life (v) (J17) |
| value of life (v) (J17) | consumption sacrifice (E21) |
| life expectancy (le) (J17) | consumption sacrifice (E21) |
| mortality rate (J11) | life years lost (L) (J17) |
| life years lost (L) (J17) | consumption sacrifice (E21) |