The worth of a life: COVID and the limits of economics

June 5, 2020 • Reading time 5 minutes

Christian Moroy, Kieran Dale, Jennifer Connolly, Paul Cusson and George Batchelor.

As we are emerging from lockdown, plenty of discussions abound. Are we opening too early? Are we opening too late? A question that gets raised repeatedly is about the economic cost of the lockdown. It is clear that while we have saved many lives, we are emerging amidst the worst economic crisis since the Great Depression. Many have lost their jobs, and some are turning to economists to ask if lockdown was justified. We find that applying cost-benefit analysis can yield useful insights but unfortunately, when it is the poor and least productive members of society who suffer the most, economics will only get us so far. We have to take a look at healthcare provision in general and have to ask bigger questions about what kind of society we want to be.

The cost of lockdown in the UK so far: £40 billion

UK GDP fell by 2.0% in the first quarter of 2020. Compared to the previous quarter, this corresponds to a pre-lockdown average loss of £3.5b per month. If, as the Bank of England forecasts, the economy shrinks 14%, this means a loss of £24.5b per month. Assuming lockdown is lifted at the end of June[2], this results in a loss so far of £42b[3].

The benefit of lockdown in the UK so far: 460,000 lives saved (so far)

If we assume that lockdown measures were effective in reducing the pandemic fatality rate from 510,000 in an unmitigated scenario[4] to 50,000[5], it would mean in the UK alone the lockdown saved about 460,000 lives.[6],[7].

The worth of life: rough assumptions are needed, but lockdown seems justified

Cost-benefit analysis requires us to put a cost on this. If we assume that the average Covid victim is 75 years old[8] with an average (non-Covid) life expectancy of approximately 80 years, there are five years saved per victim. According to NICE, this should be valued at £25,000/year[9], which equates to £125,000 per life saved. This means that for those 460,000 saved lives in these terms we compare £57.5b with a cost of £42b, there is a benefit of £15.5b[10]. While a dark way to look at it, these figures[11] would absolutely speak in favour of the lockdown.

Lockdown might only be worth it if we get a vaccine

For our calculation above, we heavily rely on the prospect of a vaccine (or at least no further economic damage post lockdown). If we think there will not be a vaccine and everyone will get sick anyway, then the benefit of lockdown would be reduced (it would still save the system from being overwhelmed but not save as many lives would be saved).[12] This may be an optimistic assumption, but thankfully, recent vaccine results are promising.

It is the poor and vulnerable in front line professions who suffer the most

Recent US studies have similarly demonstrated the benefit of lockdown[13]. Some of these have been criticised for not taking into account how productive lost lives will be. This is a highly controversial angle as of course; those aged 65+ years are not as economically productive as younger people. Even worse for the productivity hawks, the lives saved are likely vulnerable and poor as well. This is where the economic cost/benefit analysis reaches its limit, and we have to ask what kind of society we want to be.

A strong intervention during COVID seems at odds with lack of intervention elsewhere

At least in the UK and Europe more generally, the answer is quickly answered in favour of universal healthcare provision supportive of insuring even the most disadvantaged. An obvious rebuttal will be to point out that this is not necessarily true across all domains of life. We seem to be happy to intervene in healthcare and in particular, the current COVID imposed lockdown to an extend much large than for example traffic, pollution (climate change?) or social issues where lives could be saved at low cost.

Health (life) is unique

It seems to be a particular kind of threat that we are facing at the moment, which leads to a particularly visceral response. This is coupled with the fact that western countries have historically accepted healthcare as a sphere where the state can and should legitimately intervene. We seem to have a strong intuitive reaction to unequal healthcare outcomes from an invisible disease. We understand instinctively how this can be deeply unfair, leading to us to being more accepting and even asking for government intervention when we reject it elsewhere. It is thus highly likely that people will continue to favour locking down protect the weak and save lives even at a great economic cost.


[2] And a linearly decreasing monthly loss over the period from April to June.

[3] This is the cost “until today” and against a counterfactual of No-Covid. A further step would be to compare to “Covid but No-Lockdown” e.g. Sweden which is forecasted a 7% contraction of GDP as opposed to UK’s 14%. This calculation would suggest the economic benefit of no-lockdown may only be half of our figure and we are thus conservative.

[4] Figure from Imperial Study, approximately until August 2020. A small proportion of deaths modelled to occur in July in the unmitigated scenario

[5]. At the time of writing this article, UK deaths are at 40,000. IHME projects approximately 45,000 deaths by August 4, which is revised upwards to 50,000

[6] Although this would be lower if people are assumed to socially distance themselves. Other figures from the Imperial study suggest that if all patients could be treated, then deaths would be 250,000. This would mean that there would be 200,000 lives saved due to lockdown measures.

[7] There are additional costs and benefits of lockdown which we have not costed for the above. Additional costs of lockdown include deaths of despair, mental health, delayed treatment of physical health as well as human capital losses due to breaks in education and job losses. Other benefits of lockdown include reduced pollution and deaths from accidents.

[8]. This analysis is assumptions-driven. Estimates on the average years of life remaining for Covid victims vary from study to study.

[9] The National Institute for Health and Care Excellence (NICE) are willing to spend £20,000-30,000 of public funds to keep a patient in good health for one extra year (there are some exceptions for rare diseases).

[10] Within this analysis, NICE’s approach to valuing years in good health has an upper limit when justifying the economic cost of lockdown. Even if the Covid death toll rose to 336k (296k above current projection), the lives saved by locking down would still mean it is worth it.

[11] The notable drawback to cost-benefit analyses in this situation is that they are highly dependent on the assumptions made. Other studies may or may not be in favour of lockdown due to their referenced figures.

[12] As long as the probability and benefits of a vaccine outweighs the cost of lockdown, our calculations are valid. Therefore, understanding the likelihood of a vaccine and when it will come is essential. There is also the genuine possibility of a partially effective vaccine, coupled with a partially enforced lockdown. This shows the difficulty and complexity of pandemic planning.

[13]. There are many approaches to valuing human life. A method favoured by this US study, and many more, is the value of a statistical life (VSL) which can be explained here. This will result in a much higher economic benefit to lives saved than NICE’s method favoured in this article.


Edge Health are a specialist UK healthcare analytics consultancy that use data and insights to improve the delivery of health and care services, so that better outcomes can be delivered more efficiently.