Economic Benefits of COVID-19 Screening Tests
We assess the economic value of screening testing programs as a policy response to the ongoing COVID-19 pandemic. We find that the fiscal, macroeconomic, and health benefits of rapid SARS-CoV-2 screening testing programs far exceed their costs, with the ratio of economic benefits to costs typically in the range of 4-15 (depending on program details), not counting the monetized value of lives saved. Unless the screening test is highly specific, however, the signal value of the screening test alone is low, leading to concerns about adherence. Confirmatory testing increases the net economic benefits of screening tests by reducing the number of healthy workers in quarantine and by increasing adherence to quarantine measures. The analysis is undertaken using a behavioral SIR model for the United States with 5 age groups, 66 economic sectors, screening and diagnostic testing, and partial adherence to instructions to quarantine or to isolate.
We thank Alan Auerbach, Daniel Larremore, Larry Summers, and seminar participants at Johns Hopkins University, the Federal Reserve Bank of Boston, and the Harvard Kennedy School for helpful discussions and/or comments. Droste and Stock acknowledge research support under NSF RAPID Grant SES-2032493. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.