For those interested in more details from the paper, but don’t have time to read it, here is my summary of the key bits in 15 points:
#1 GDP and life expectancy are linked: “Very good correspondence between actual and predicted population-average life expectancy against GDP per head (a correlation coefficient, R, of 0.77) was found for 180 out of the 193 nations recognised by the United Nations in 2009 and excellent correspondence (R = 0.89) for 162 countries.”
#2 The estimated value of a ‘life year’ in the UK is about quarter of a million pounds - £248,209 to be precise (p6). What does this mean?
#3 He answers: “This implies that the Government and commercial organisations in the UK would be justified in spending up to just under a quarter of a million pounds on a scheme that would extend by one year the life expectancy of a citizen” (p6)
#4 However, he qualifies this in instances where the scheme may have adverse effects on a nations economic output, since a fall in GDP will reduce life expectancy thus potentially eliminating the gain you have just paid for: “protection schemes should not be put in place if their costs are large enough to cause the nation’s economic output to fall so significantly that it will cause more loss of life than if the scheme had never been implemented.” (p7)
#5 Various options he considers include:
a. Option 0 (do nothing and let the virus run its course).
b. Option 4 (a year’s lockdown and widespread vaccination achieved within 12 months).
#6 If economic output is not damaged:
a. Option 0: Costs ~16.7 million life years (=573,000 deaths). Minimal economic spend.
b. Option 4: Costs ~200k life years (i.e. saves ~16.5 million life years). This is the option most similar to what is being pursued by the UK government now. Calculations show government would be justified in spending up to a maximum of ~£4 trillion to achieve this (=16.5million life years x £250k per life year) (Table 4, p26). Again, this is assuming economic output / GDP is not reduced as this would reduce life expectancy thus costing more ‘life years’.
#7 He then factors in the economic damage in terms of how a resulting drop in GDP reduces life expectancy and so cancels out the ‘life years saved’: “However, if the cost borne by UK citizens of implementing Option 4 is so great that their total life expectancy is reduced by an even greater amount, then the option should not be pursued.” (p15)
#8 Since Option 4 saves 16.5 million life years, for a UK population of 67,000,000 this corresponds to spending no more than that which causes a maximum 3 month decrease in average population life expectancy in order to attain it (=16.5/67 years). (p15)
#9 In terms of GDP, a 3 month decrease in life expectancy is caused by a 6.4% drop in economic output per head.
#10 He concludes w.r.t Option 4: “a recession resulting in a general fall in economic output of 6.4% per person over a prolonged period would cost more life than would be restored by Option 4.” (p15)
#11 For comparison, the 2007-2009 recession led to 6% reduction in GDP and did not recover its 2007 figure until 2015. The average drop in life expectancy was seen to be at least 3 months. (p15). Thus, the economic cost of Option 4 must be limited to a recession no worse than that of 2007-2009 to be worthwhile. (p16)
#12 But that doesn’t seem likely: “The Centre for Economics and Business Research is now predicting that the coronavirus pandemic will cause global GDP to decline twice as much as during the financial crisis of 2007 – 2009. Furthermore, it raises the prospect of a 1930s-style recession” (p16)
#13 Thus Option 4 is vastly inferior to Option 0 in terms of life years: “Such an outcome, if it were to come about, would cause a loss of life years to the UK population that would dwarf the predicted toll under Option 0.“ (p16)
#14 Initial data from Germany also suggests similar conclusion: “IFO Institute of Munich has recently concluded that a partial shutdown of 2 months duration will reduce German annual GDP by between 7.2 and 11.2 percentage points, while extending the period by a further month would cause annual GDP to fall by between 10 and 20.6%.” (p16)
#15 “Such outcomes, if they were transferred to the UK, would be sufficient to cause significantly greater loss of life than would be gained by the lockdown measure, especially if the partial shutdown of the economy were to last more than 2 months in total.” (p16)