Estimated Benefits of Incremental Suppression of Covid-19 Spread

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