Estimated Benefits of Incremental Suppression of Covid-19 Spread

Chi Keung Woo, Kang Hua Cao*, Yun Lyndon Liu, Qiqi Li

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review


Estimated benefits are necessary for a cost benefit analysis of Covid-19 suppression. We propose a stock-market-based approach to estimate the benefits of incremental suppression of Covid-19’s spread that will last till no new cases are recorded for 14 days, the projected incubation period of Covid-19. This approach’s empirical implementation uses a) total capitalization of 14 market indices for large cap stocks; and b) an index’s estimated elasticity of cumulative confirmed cases (CCC) obtained from a panel data analysis of 727 daily observations in the period of 01/21/2020-04/03/2020. Our estimated benefits of a hypothetical 10% reduction in CCC due to incremental suppression are statistically significant (p-value < 0.05), ranging from US$0.76 billion for Singapore to US$70 billion for the US. As the S & P 500 index’s capitalization is 70% - 80% of the US total market capitalization, the adjusted US benefit estimate is up to US$100 billion. Finally, we verify that these estimated benefits are empirically reasonable.
Original languageEnglish
Article numbere6645
Number of pages13
Issue number8
Publication statusPublished - 21 Aug 2020

User-Defined Keywords

  • Covid-19
  • Suppression Benefit
  • Stock Markets


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