UNC economist asks why state remains in coronavirus lockdown

by Mitch Kokai

Chapel Hill, NC – UNC-Chapel Hill economist Martin Zelder (guest on the latest edition of the John Locke Foundation’s “HeadLocke” podcast) submits a new column this week. He continues to question state government’s approach to COVID-19.

photo by Wesley Tingey

Why Are We Still In Coronavirus Lockdown?

Suppose you lived in a swamp that was infested by mosquitoes whose bites cause illness and occasionally death, and I proposed to you the following: tear out all vegetation, drain all bodies of water, and only go outdoors 15 minutes a day. And suppose that I insisted that you continue these practices every day for as long as mosquitoes are still a risk. Would you want me to be your Mosquito Abatement Commissioner?

The example is silly, but the analogy, to North Carolina’s coronavirus policy, is not. It raises a number of questions—answered here—whose answers are being overlooked at our peril.

Compared to the rest of the U.S., how serious is North Carolina’s current coronavirus risk? Not very. North Carolina (with 10.5 million residents) now has 17,000 coronavirus cases, or 1,500 coronavirus cases for every 1 million (!) people living in North Carolina. Is 1,500 per million a big number? Not compared to other states in our country. In the U.S., the average is 4,300 cases per million people, roughly 3 times the N.C. rate. (Some numbers are rounded to make them easier to digest.) We have had 590 deaths from coronavirus, or 60 deaths per million citizens. The U.S. average is 250, more than four times the N.C. death rate.

Are North Carolina’s coronavirus case and death numbers improving or worsening over time? It’s improving (by most measures). Obviously, there are more new cases and new deaths every day, meaning that North Carolina’s 1,500 cases (per million people) and 60 deaths (per million people) will mathematically rise every day. Widely publicized are the numbers of new cases each day. And, daily new cases are rising: 233 per day during the week April 1-7 up to 457 per day the week of May 6-12. This current daily case rate is two times that from early April.

Do growing case numbers accurately reflect North Carolina’s risk? Not very well. First, the growth in new cases is an inescapable and mechanical consequence of the enormous growth in daily testing. Over April 1-7 there were 2,800 new tests per day, but this number has grown every week, reaching more than 7,000 per day for the week of May 6-12. This new daily testing rate, 2.5 times its baseline level, has resulted in two times more daily cases. By itself, this is neither surprising nor worrisome. The true issue is the following: how sick are those with existing and new infections?

Are there people in North Carolina dying from the coronavirus? Yes, but there are very encouraging signs. Every day, I calculate the fraction of coronavirus cases who are in a North Carolina hospital (and many other pertinent numbers). With 17,000 cases and 500 hospitalized, the current fraction is 3%, which has fallen from 7% only three weeks ago. Of those hospitalized, the fraction who die is 0.7 percent (or 7 per 1,000) down from 4% three weeks ago. This means that about four hospitalized coronavirus patients are dying each day. (About 230 North Carolinians die each day from causes other than the coronavirus.)

Is the risk to the general public lower than current data suggest? Yes. Many people have become increasingly aware that there are high rates of coronavirus infection and death in what the state calls “congregate living” situations: nursing homes, adult care facilities, correctional facilities. There are slightly more than 100,000 N.C. residents in congregate living—that is, they are about 1% of our state’s population. So, our state’s death rate—about 60 deaths per million N.C. citizens—is the average for people in congregate living and the other 99% of us who are not. Of the 528 deaths where the state can identify people in congregate living settings and those not, 359 have occurred in congregate living and 169 outside of congregate living—68% of all deaths with attributed locations have occurred in congregate living. Put another way, 359 deaths out of a congregate-living population of more than 100,000 is a death rate exceeding 0.3% (1 out of 300 people in congregate living). This tells us two things: There is a much more serious coronavirus situation in congregate living, and a much less serious situation for those 99% not in congregate living. By comparison, the 169 non-congregate-living deaths relative to the non-congregate-living N.C. population of 10.4 million is a death rate of 0.002% (1 out of 50,000 people not in congregate living).

How much do lockdowns help? Not so much, especially after six weeks. Back on March 31, Day 1 of our Executive Order, North Carolina had a lower infection rate (140 per million population) than did Arkansas (170) and Wyoming (180), who were two of the 11 states that never imposed a statewide stay-at-home order. Now, six weeks later, our N.C. rate (1,500) is actually a little worse than Arkansas’ (1,400) and Wyoming’s (1,200). As well, my careful analysis finds that each new lockdown day currently has a smaller beneficial effect—reducing new infections by seven—than it did a month ago (when there were 14 fewer infections for each new lockdown day for April 11-17).

Does extending our lockdown pass anyone’s cost-benefit test? I sincerely doubt it. A recent Moody’s Analytics study found that states with lockdowns were losing roughly 30% of daily gross domestic product each day the lockdown continued. How much is this for North Carolina? North Carolina’s annual GDP of $450 billion means that its daily GDP is $1.2 billion. Taking 30% of $1.2 billion gives us a lockdown loss of $375 million per day. And this doesn’t capture costs, as a result of social distancing, from multitudes of lost but valuable human interactions (the essence of what it is to be a human being, and undoubtedly of enormous value that’s likely far in excess of the commercial value lost to the lockdown), which are reflected to some degree in the heightened incidence of noncoronavirus deaths and illnesses, including mental-health impacts. But suppose that we said that ending the lockdown would restore 10% of the daily GDP loss, amounting to $37 million per lockdown day, and then added in social and other health costs from the lockdown of around $5 million per lockdown day. This highly conservative estimate would mean that the seven-case daily coronavirus reduction from an additional lockdown day is costing us $42 million ($37 million plus $5 million), or $6 million per case prevented.

I like the coronavirus even less than I do mosquitoes, but we should ask whomever is in charge of Coronavirus Abatement why we are using such an expensive and life-draining abatement strategy, and seek a second opinion.