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Our economic wellbeing is intertwined with the COVID pandemic. We are currently in recovery from the sharpest decline in economic activity in one month on record. The cause of that recession is the implementation of public health measures collectively referred to as lockdown.
The question is the effectiveness of these lockdown measures and whether other measures could be as effective at lower cost. These are issues to which economists can apply our research tools to investigate.
In studying alternative policies, economists are at a disadvantage in that controlled experiments are rare. Seldom do we have the luxury of two matched groups, one which is exposed to a particular policy, the other not.
But sometimes circumstances can provide a situation which amounts to a “natural experiment.” For example, two towns essentially identical in circumstances, except one is located in one jurisdiction, the other located in another jurisdiction. Suppose, then, one jurisdiction adopts a policy that the other does not — like mandatory mask wearing.
This is exactly the circumstances looked at recently by a group of Simon Fraser University economists led by Alexander Karaivanov using data from Ontario, Canada. In particular, Ontario allowed local health districts to determine for themselves when and whether to impose mandatory indoor mask mandates.
The consequence was that different districts adopted mandatory mask policies at different dates. By comparing the districts, it was possible to determine the effectiveness of mask mandates.
A natural experiment is not a controlled experiment, so it is necessary to use statistical tools to control for variation among different districts. In this particular study, Google mobility data, total cases and case growth and changes in testing rates were all controls.
After controlling for all these factors, the Simon Fraser group found that an indoor mask mandate reduced new cases by 25 percent per week.
But what about more restrictive measures, such as closing of non-essential businesses and schools, travel restrictions and restrictions on public gatherings. Here, the Simon Fraser economists looked at differences among Canadian provinces in regard to implementation dates and strictness of public health interventions.
They found that the strictest policies resulted in a reduction in transmission by 50 percent. School closures and travel restrictions were found to be most effective at limiting transmissions.
While economists can give insight into which policies are more effective and which are less effective, this doesn’t answer the question: Is a particular restriction worth the cost? Mandating the wearing of a 50-cent mask imposes costs on the public in terms of inconvenience and loss of personal freedom, but with the benefit of a significant reduction in transmission.
Closing schools is also effective in reducing transmission, but at much higher cost in terms of the education and social development of children. Where to draw the line on the balance between public good vs. private costs is the art of government. It is a difficult call for public officials in making life-and-death decisions.
Christopher A. Erickson, Ph.D., is a professor of economics at NMSU. He’s taught economics since 1984. The opinions expressed may not be shared by the regents and administration of NMSU. Chris can be reached at firstname.lastname@example.org.