Ending Lockdown in Georgia
Governor Brian Kemp announced on April 20 an end to the general lockdown in Georgia. Is that a good idea? To decide that, we need to do a risk/benefit analysis.
Start with the risk. According to the public health experts the number of new cases in Georgia has been running about 700 per day. They expect that ending the lockdown will increase that number to a little over 1,000 per day, while if the lockdown had been continued, it would have dropped to about 500 per day. So we should expect an extra 500 cases per day as a result of ending the lockdown. The case fatality rate is about 1% - 2%, so the number of extra deaths should be about 5 to 10 per day. Since Georgia has a population of about ten million, that increases the risk of death by about one in a million to one in two million per day. A one in a million risk is about the same as the risk of driving 100 miles. That is a bigger risk than most people take in a day, but not a ridiculously bigger one. Since on average people would spend about $9 to avoid a one in a million chance of dying, that means the total cost of the increased risk due to ending the lockdown is about $45 to $90 million per day, or about $300 to $600 million per week.
Next we compute the benefits.
Georgia's GDP is a bit more than $600 billion. The is a bit more than $12 billion per week. It's hard to estimate how much of that is being lost due to the lockdown, but since the middle of March, the Georgia Department of Labor has processed over 1.3 million claims. That is about a quarter of the workforce. That implys the state is losing about $3 billion per week. It is probably somewhat less than that because the people who can work from home tend to be higher income. Not all of the loss will be recovered by ending the lockdown, because some of the restrictions will still continue and people will be cautious about resuming normal life. So, we should expect a gain of about $1 billion to $2 billion per week.
So, based on those assumptions, the decision to lift the lockdown passes a risk/benefit test by a margin of about 3 to 1.
The biggest assumption in this analysis is that the new cases will remain at about 1,000 per week. If the number increases exponentially into the tens of thousands, then that would blow this analysis to pieces.