We are in the middle of a flurry of decision-making on how to deal with COVID-19. After much resistance, officials are now canceling public events, closing schools and discouraging other activities that put us in contact with each other. Travel restrictions and possible shutdowns of workplaces, as we’ve seen in Italy, may be up next.
It’s interesting we haven’t heard anything about benefit-cost analysis in all this. Nearly all economists profess to think that BCA is the single best decision method. Almost every introductory economics textbook is built around benefit-cost thinking, and for decades federal regulations have mandated BCA for proposals with significant economic impacts.
But now we are facing immense choices—what could have a more drastic impact than shutting down most of the economy by fiat?—and BCA is nowhere to be found.