Analysis of the tradeoff between health and economic impacts of the Covid-19 epidemic

TL;DR

This paper uses a simplified SEIR model and a pragmatic decision-making framework to analyze the tradeoff between health and economic impacts of Covid-19 measures, providing insights into optimal epidemic management strategies.

Contribution

It introduces a pragmatic model for government decision-making that helps determine optimal timing and severity of epidemic phases, applicable to any country.

Findings

Optimal 4-phase strategy could reduce infections significantly.

Current strategies are economically efficient but could improve health outcomes.

Frequent updates to measures are recommended due to behavioral deviations.

Abstract

Various measures have been taken in different countries to mitigate the Covid-19 epidemic. But, throughout the world, many citizens don't understand well how these measures are taken and even question the decisions taken by their government. Should the measures be more (or less) restrictive? Are they taken for a too long (or too short) period of time? To provide some quantitative elements of response to these questions, we consider the well-known SEIR model for the Covid-19 epidemic propagation and propose a pragmatic model of the government decision-making operation. Although simple and obviously improvable, the proposed model allows us to study the tradeoff between health and economic aspects in a pragmatic and insightful way. Assuming a given number of phases for the epidemic and a desired tradeoff between health and economic aspects, it is then possible to determine the optimal duration of each phase and the optimal severity level for each of them. The numerical analysis is performed for the case of France but the adopted approach can be applied to any country. One of the takeaway messages of this analysis is that being able to implement the optimal 4-phase epidemic management strategy in France would have led to 1.05 million infected people and a GDP loss of 231 billion euro instead of 6.88 million of infected and a loss of 241 billion euro. This indicates that, seen from the proposed model perspective, the effectively implemented epidemic management strategy is good economically, whereas substantial improvements might have been obtained in terms of health impact. Our analysis indicates that the lockdown/severe phase should have been more severe but shorter, and the adjustment phase occurred earlier. Due to the natural tendency of people to deviate from the official rules, updating measures every month over the whole epidemic episode seems to be more appropriate.