Estimated benefits are necessary for a cost benefit analysis of Covid-19 suppression. We propose a stock-market-based approach to estimate the benefits of incremental suppression of Covid-19’s spread that will last till no new cases are recorded for 14 days, the projected incubation period of Covid-19. This approach’s empirical implementation uses a) total capitalization of 14 market indices for large cap stocks; and b) an index’s estimated elasticity of cumulative confirmed cases (CCC) obtained from a panel data analysis of 727 daily observations in the period of 01/21/2020-04/03/2020. Our estimated benefits of a hypothetical 10% reduction in CCC due to incremental suppression are statistically significant (p-value < 0.05), ranging from US$0.76 billion for Singapore to US$70 billion for the US. As the S & P 500 index’s capitalization is 70% - 80% of the US total market capitalization, the adjusted US benefit estimate is up to US$100 billion. Finally, we verify that these estimated benefits are empirically reasonable. Copyright © 2020 by author(s) and OpenAccess Library Inc.
CitationWoo, C. K., Cao, K. H., Liu, Y. L., & Li, Q. (2020). Estimated benefits of incremental suppression of Covid-19 spread. Open Access Library Journal, 7(8). Retrieved from https://doi.org/10.4236/oalib.1106645
- Suppression benefit
- Stock markets