A new report Quantifying the wellbeing costs of Covid-19 by the New Zealand Initiative shows how an economic hit of about 6.1% of GDP would be justified if it meant saving 33,600 lives during the Covid-19 pandemic.

The figures, compiled by research fellow Dr Bryce Wilkinson, were generated by updating a Ministry of Health model from 2017 and plugging in the available data on Covid-19.

The 2017 model ran its calculations with data from the 1918 Spanish flu.

While putting a value on human life is a tricky subject, it is necessary to understand the correct policy proposals and trade-offs when dealing with a crisis.

When modelling the economic costs of a pandemic like Covid-19, Dr Wilkinson found that around 6.1% of GDP would be justified if it meant saving 33,600 lives

Equally, about 3.7% of GDP would be justified if 12,600 lives could be saved.

“Evaluating this trade-off is essential for good policy advice and decision-making, such as lockdown decisions and border closures,” Dr Wilkinson said.

“There is currently a dearth of published estimates to inform public debate.”

The research note Quantifying the wellbeing costs of Covid-19 neither critiques the adjusted 2017 model, nor treats it as authoritative. It simply reports the results of running the Covid-19 data through the model as a contribution to public debate.

Dr Wilkinson hopes it will encourage the Government and researchers to provide better estimates as the crisis continues to evolve.

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Quantifying the wellbeing costs of Covid-19 is available here.

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