Since the outbreak of the corona crisis governments tried to find the optimal policy strategy to tackle the adverse outcomes of the transmission of the virus while keeping associated economic and social costs low. However, few approaches have been presented that reconcile both objectives leaving policy makers often with a ‘one-size-fits-all’ approach of hard lockdowns that severely impact social and economic life. When it comes to the crucial question of choosing an appropriate public policy careful consideration of trade-offs are indispensable (Bardt and Hüther, 2021). Ronald Coase (1960, p. 44) put it best when he wrote:

“It would clearly be desirable if the only actions performed were those in which what was gained was worth more than what was lost. But in choosing between social arrangements within the context of which individual decisions are made, we have to bear in mind that a change in the existing system which will lead to an improvement in some decisions may well lead to a worsening of others.... In devising and choosing between social arrangements we should have regard for the total effect.”

Indeed, research has become more critical concerning the efficacy and trade-offs implied by lockdowns, commonly referred to as non-pharmaceutical interventions (NPIs). Current Covid-19 studies reveal that benefits (reduction in case transmissions and death growth rates) might have been overestimated and the economic and social costs of lockdowns (e.g. educational inequalities) have been underestimated. More recent papers try to discuss the important question of the total effect and to illustrate more welfare-enhancing alternatives compared to the one-size-fits-all approach.

Benefits of NPIs are generally defined as successfully altering the reproduction number and transmission rates of Covid-19. Born et al. (2021) for instance find that if Sweden had introduced a 9-week lockdown in the first half of 2020, it would have reduced infections by 75 percent causing little additional output loss. However, the study makes only a ‘first pass’ at quantifying the economic costs and ignores social costs altogether.