John Gibson and Ananish Chaudhuri
John Gibson is Professor of Economics at Waikato University. Ananish Chaudhuri is Professor of Economics at the University of Auckland. The views expressed are their own.
A recent New Zealand Herald poll finds that 46% of respondents support “elimination” while a further 39% support “elimination till vaccination”.
Does the support for elimination imply support for Level 4 lockdowns? If so, then for how long and for how many more lockdowns will people support?
How do the 39% supporting elimination till vaccination interpret their position?
Israel has vaccinated a large proportion of its population with the same Pfizer vaccine we are relying on. Yet, that vaccine has proved insufficiently effective against the Delta variant. Infections in Israel have skyrocketed of late.
A recent paper by Pfizer’s own scientists shows vaccine efficacy (VE) for infection with the Delta variant falls by 10 percentage points per month, to be just 53% if the second jab was more than 4 months ago. Falling protection was almost as fast against other variants, declining by 8 percentage points per month.
VE for the at-risk elderly (≥ 65 years) starts low and wanes at a similar rate as for all-age groups: VE against infection (from all variants) is highest at 80%, within a month of the second jab, and by four months later VE is down to 43%.
Waning protection was almost as fast against other variants, declining by 8 percentage points per month.
The Ministry of Health website suggests that New Zealand’s elimination strategy is based on four pillars.
First, “Keep it out”, which involves border control and managed isolation “designed to keep COVID-19 out of the New Zealand community and prevent onward transmission of COVID-19 from New Zealand to other countries (e.g. in the South Pacific)…”
Second, “Prepare for it”: here the key risk being mitigated is to prevent “undetected cases of COVID-19 in the community”.
The third pillar is “Stamp It Out” which “encompasses contact tracing and case management to eliminate COVID-19 as quickly and efficiently as possible from the community, and the activation of higher Alert Levels to contain the spread of any incursion.”
The fourth pillar is “Manage the impact” which is less immediately relevant to the current discussion.
The above does not automatically suggest that “elimination” and “Level 4 lockdowns” need to be synonymous. Leaving aside border control policies, with adequate testing and contact tracing, elimination should be achievable even in the absence of Level 4 lockdowns.
Indeed, other countries such as Taiwan seem to have managed such elimination successfully.
Suppose we assume that elimination is synonymous with lockdowns. What have we learned in the last eighteen months or so?
The headline results from the (in)famous Imperial College paper of Ferguson et al assume an absence of “spontaneous changes in individual behaviour” (p.6).
Yet empirical study of actual humans (e.g. their shopping patterns) finds almost 90% of response was private action, and so the models greatly overstate lockdown efficacy (and are too alarming about the no-lockdown option).
Subsequent studies looked at Covid-19 deaths, as the outcome that really matters, and also because deaths data should be more reliable than infections data. Variation in the strength of lockdown (or lockdown versus no lockdown) is not related to variation in Covid-19 death rates. Yet the question of death with Covid versus death from Covid affects these studies, especially as jurisdictions with good public health data start to retrospectively revise Covid death totals, which were inflated by up to one-third.
The most recent studies look at all-cause mortality, as these data have fewer biases (one is dead or not, irrespective of cause) and also show lockdown collateral damage. Across European countries, stricter lockdowns did not reduce excess mortality, while across 43 countries and all U.S. states excess mortality rose following the imposition of lockdowns.
Local defenders of lockdown may note New Zealand had no excess mortality in calendar year 2020. However, an unprecedented post-lockdown surge in deaths that carried on through the summer into 2021 largely reverses that pattern if the full 12 months after the first lockdown is considered.
While lockdowns have not worked to reduce deaths in the present, they almost certainly harm future life expectancy. This especially matters for New Zealand, due to the following:
The long-run relationship between the real value of our economic activity (what we produce) and life expectancy is 50% higher than the OECD average. A 10% fall in real GDP, in the long-run, reduces NZ life expectancy 1.8% below what it otherwise would be. So these trade-offs should matter more here than elsewhere.
Real GDP in 2020 was 5.2% below expectation (using the last 2019 fiscal update). Part of this fall was outside our control but much is from a “go hard” approach. With a Covid response stringency of the median OECD country our 2020 GDP growth rate would be 3 percentage points higher (lockdown stringency is unrelated to mortality so this is all pain no gain).
The $14 billion of output not produced in 2020 is not shifted through time, it is a permanent loss. The same will be true for the 2021 lockdown. A share of future output also has to go on debt-servicing, as NZ tried to borrow her way out of this pandemic, and so is not available to fund improvements in life expectancy.
New Zealand residents currently alive can expect 224 million more life years (based on the latest 2017-19 period life tables). If real GDP ultimately falls 10% below what was expected pre-Covid (e.g. if Level 4 lasts as long as in 2020), and if we apportion half of this to the unusually harsh NZ response (rather than to overseas factors), then our politicians and health bureaucrats will have presided over a fall in life expectancy where there are two million fewer life years than would otherwise be expected. If this loss was full concentrated on a select group, it is equivalent to 46,000 deaths.
In case one doubts these calculations, note that the Treasury long-term fiscal forecasts released recently show future life expectancy is almost two years below what they had previously forecast in 2016.
Putting all of the above together, a thorough review by Canadian economist Douglas Allen concluded that lockdowns will go down as one of the greatest peacetime policy failures.