The Dilemma of Balancing Public Health and Economic Concerns: Benefit and Cost Analysis on China’s COVID-19 Policy Under Monte Carlo Simulation

Abstract

This study explores the dilemma of balancing public health and economic concerns during a pandemic through a cost-benefit analysis approach in public economics. To estimate the impact of public health policies during an epidemic, this research innovatively applies the Monte Carlo simulation algorithm, using both top-down and bottom-up methods to avoid double counting. The study focuses on zero-clearance public health policy, analyzing the value of lives saved and the economic output decline of the society as a whole during the pandemic as the benefit and cost of preserving lives, respectively. Additionally, the study examines the decreased infected population and medical expenses gained through reductions in mortality due to public health policies, estimating the costs and expenses associated with COVID-19 infection and unemployment using a bottom-to-up method. The study concludes with a discussion of the limitations in data comprehensiveness and authenticity, as well as the particularities of public health policies based on political attributes.