Cost Benefit Analysis: mass testing for COVID-19

Paul Solman on PBS last week interviewed Nobel Prize winner Paul Romer about how the US should go about containing the virus and open up the economy. He is proposing mass testing the population every two weeks.

He states that each additional unit of testing frees up approximately 9 people who can go back to work. So how to does the cost of 1 test compare to 9 people being able to go back to work? He gives the example where the cost of 1 test each day of the year = $3,650 but the income generated by getting people back to work = $450,000 – these figures are approximate.

With this model he suggest that $100bn a year needs to be spent on testing which means 23 million tests per day or test the population every 14 days in the US. Worth a look.

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