Exam 2Each question is worth 25 points.
1.
Look at the general revenues of Jacksonville and Tampa reported in their 2021 Comprehensive
Annual Financial Reports. Their Statements of Activities that report their general revenues are
linked to this assignment. Calculate the percentage of sales taxes and property taxes relative to
the Total Revenue for Government Activities for both cities.
a. Discuss the relative fairness of the two city’s revenue schemes based on the ability to pay
criterion (progressive, proportional, or regressive). Which city is likely to have a more
regressive overall revenue scheme? Explain your answer.
b. Discuss the relative stability of the two city’s revenue schemes. Which city is likely to be
more harmed by an economic recession like the one caused by the Covid19 crisis? Explain
your answer.
2.
Use the Excel spreadsheet linked to this assignment that shows the per capita expenditures for
various categories of spending in both Jacksonville and Tampa. Tampa’s per capita expenditures
are combined with Hillsborough County’s per capita expenditures in each category in order to
make an apples to apples comparison since Jacksonville is both a county and a city. Answer the
following questions.
a. Do you think Jacksonville is spending enough on public safety compared to Tampa? Why or
why not. Also, look at the crime rates reported by the FBI for both cities linked here.
b. In what expenditure category is Jacksonville being more efficient relative to Tampa? Explain
your answer?
c. Do you think that Jacksonville is spending enough on infrastructure (Physical Environment)
and economic development (Economic Environment) compared to Tampa? Why or why
not?
d. Notice that Jacksonville’s debt service is the second largest amount of any of its spending
categories. How does that affect Jacksonville relative to what Tampa is able to spend in
other categories?
3.
Evaluate whether a benefit cost analysis shows that the lockdown caused by the COVID19 crisis
was worth it. Look for estimates of the amount of economic damages caused by the quarantine
(lost jobs, lost GDP, stock market losses, etc.) and then look for comparisons of the number of
deaths with and without the lockdown. I’ve given you links to some articles that discuss the
issue, but I’m sure you can find many more. Give a summary of the various opinions and then
discuss your own conclusion about whether the lockdown was worth it.
Forbes article
American Enterprise Institute article
PDF of Economist article attached to assignment.
4.
The second tab of the attached Excel spreadsheet shows census data for all Jacksonville’s zip
code areas. Suppose that the new mayor of Jacksonville has committed to building affordable
housing in five of Jacksonville’s zip codes. Use this data to determine which five zip codes
should be the sites for the affordable housing. Explain your five choices.
How to assess the costs and benefits of lockdowns
The policy will stay in governments’ toolkits. A growing body of research will guide its use
Jul 1st 2021
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“To me, i say the cost of a human life is priceless, period,” said Andrew Cuomo, the governor of New York
state. As they tried to slow the spread of covid-19 in the spring of 2020, politicians took actions that
were unprecedented in their scale and scope. The dire warnings of the deaths to come if nothing was
done, and the sight of overflowing Italian hospitals, were unfamiliar and terrifying. Before the crisis the
notion of halting people’s day-to-day activity seemed so economically and politically costly as to be
implausible. But once China and Italy imposed lockdowns, they became unavoidable elsewhere.
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Much of the public debate over covid-19 has echoed Mr Cuomo’s refusal to think through the
uncomfortable calculus between saving lives and the economy. To oversimplify just a little, the two sides
of the lockdown debate hold diametrically opposed and equally unconvincing positions. Both reject the
idea of a trade-off between lives and livelihoods. Those who support lockdowns say that they have had
few malign economic effects, because people were already so fearful that they avoided public spaces
without needing to be told. They therefore credit the policy with saving lives but do not blame it for
wrecking the economy. Those who hate lockdowns say the opposite: that they destroyed livelihoods but
did little to prevent the virus spreading.
The reality lies between these two extremes. Lockdowns both damage the economy and save lives, and
governments have had to strike a balance between the two. Were trillions of dollars of lost economic
output an acceptable price to pay to have slowed transmission of the disease? Or, with around 10m
people dead, should the authorities have clamped down even harder? Now that politicians are
considering whether and when to lift existing restrictions, or whether to impose new ones, the answers
to these questions are still crucial for policy today. Alongside vaccines, lockdowns remain an important
way of coping with new variants and local outbreaks. In late June Sydney went into lockdown for two
weeks; Indonesia, South Africa and parts of Russia have followed suit.
Countries have used a range of measures to restrict social mixing over the past year, from stopping
people visiting bars and restaurants to ordering mask-wearing. The extent to which these strictures have
constrained life has varied widely across countries and over time (see chart 1). A growing body of
economic research now explores the trade-off between lives and livelihoods associated with such
policies. Economists have also compared their estimates of the costs of lockdowns with those of the
benefits. Whether the costs are worth incurring is a matter for debate not just among wonks, but also for
society at large.
People who see no trade-off at all might start by pointing to a study of the Spanish flu outbreak in
America in 1918-20 by Sergio Correia, Stephan Luck and Emil Verner, which suggested that cities that
enacted social distancing earlier may have ended up with better economic outcomes, perhaps because
business could resume once the pandemic was under control. But other economists have criticised the
paper’s methodology. Cities with economies that were doing better before the pandemic, they say,
happened to implement restrictions earlier. So it is unsurprising that they also fared better afterwards.
(The authors of the original paper note that pre-existing trends are “a concern”, but that “our original
conclusion that there is no obvious trade-off between ‘flattening the curve’ and economic activity is
largely robust.”)
Another plank of the no-trade-off argument is the present-day experience of a handful of places.
Countries such as Australia and New Zealand followed a strategy of eliminating the virus, by locking
down when recorded infections rose even to very low levels and imposing tough border controls. “Covid19 deaths per 1m population in oecd countries that opted for elimination…have been about 25 times
lower than in other oecd countries that favoured mitigation,” while “gdp growth returned to prepandemic levels in early 2021 in the five countries that opted for elimination,” argues a recent paper in
the Lancet. The lesson seems to be that elimination allows the economy to restart and people to move
about without fear.
Something for nothing
But correlations do not tell you much. Such countries’ success so far may say more about good fortune
than it does about enlightened policy. What was available to islands such as Australia, Iceland and New
Zealand was not possible for most countries, which have land borders (and once the virus was spreading
widely, eradication was almost impossible). Japan and South Korea have seen very low deaths from
covid-19 and are also cited by the Lancet paper as having pursued elimination. But whether they did so
or not is questionable; neither country imposed harsh lockdowns. Perhaps instead their experience with
the sars epidemic in the early 2000s helped them escape relatively unscathed.
When you look at more comparable cases—countries that are close together, say, or different parts of
the same country—the notion that there is no trade-off between lives and livelihoods becomes less
credible. Research by Goldman Sachs, a bank, shows a remarkably consistent relationship between the
severity of lockdowns and the hit to output: moving from France’s peak lockdown (strict) to Italy’s peak
(extremely strict) is associated with a decline in gdp of about 3%. Countries in the euro area with more
excess deaths as measured by The Economist are seeing a smaller hit to output: in Finland, which has
had one of the smallest rises in excess deaths in the club, gdp per person will fall by 1% in 2019-21,
according to the imf; but in Lithuania, the worst-performing member in terms of excess deaths, gdp per
person will rise by more than 2%.
The experience across American states also hints at the existence of a trade-off. South Dakota, which
imposed neither a lockdown nor mask-wearing, has done poorly in terms of deaths but its economy, on
most measures, is faring better today than it was before the pandemic. Migration patterns also tell you
something. There have been plenty of stories in recent months about people moving to Florida (a lowrestriction state) and few about people going to Vermont (the state with the fewest deaths from covid19 per person, after Hawaii), points out Tyler Cowen of George Mason University. Americans, at least, do
not always believe that efforts to control covid-19 make life more worth living.
What if all these economic costs are the result not of government restrictions, though, but of personal
choice? This too is argued by those who reject the idea of a trade-off. If they are correct, then the notion
that simply lifting restrictions can boost the economy becomes a fantasy. People will go out and about
only when cases are low; if infections start rising, then people will shut themselves away again.
A number of papers have bolstered this argument. The most influential, by Austan Goolsbee and Chad
Syverson, two economists, analyses mobility along administrative boundaries in America, at a time when
one government imposed restrictions but the other did not. It finds that people on either side of the
border behaved similarly, suggesting that it was almost entirely personal choice, rather than government
orders, which explains their decision to limit social contact; people may have taken fright when they
heard of local deaths from the virus. Research by the imf draws similar conclusions.
There are reasons to think these findings overstate the power of voluntary behaviour, however. Sweden,
which had long resisted imposing lockdowns, eventually did so when cases rose—an admission that they
do make a difference. More recent research from Laurence Boone of the oecd, a rich-country think-tank,
and Colombe Ladreit of Bocconi University uses slightly different measures from the imf and finds that
government orders do rather a lot to explain behavioural change.
Moreover, the line between compulsion and voluntary actions is more blurred than most analysis
assumes. People’s choices are influenced both by social pressure and by economics. Press conferences
where public-health officials or prime ministers warn about the dangers of the virus do not count as
“mandated” restrictions on movement; but by design they have a large effect on behaviour. And in the
pandemic certain voluntary decisions had to be enabled by the government. Topped-up unemployment
benefits and furlough schemes made it easier for people to choose not to go to work, for instance.
Put all this together and it seems clear that governments’ actions did indeed get people to stay at home,
with costly consequences for the economy. But were the benefits worth the costs? Economic research
on this question tries to resolve three uncertainties: over estimates of the costs of lockdowns; over their
benefits; and, when weighing up the costs and benefits, over how to put a price on life—doing what Mr
Cuomo refused to do.
The cure v the disease
Start with the costs. The huge collateral damage of lockdowns is becoming clear. Global unemployment
has spiked. Hundreds of millions of children have missed school, often for months. Families have been
kept apart. And much of the damage is still to come. A recent paper by Francesco Bianchi, Giada Bianchi
and Dongho Song suggests that the rise in American unemployment in 2020 will lead to 800,000
additional deaths over the next 15 years, a not inconsiderable share of American deaths from covid-19
that have been plausibly averted by lockdowns. A new paper published by America’s National Bureau of
Economic Research (nber) expects that in poor countries, where the population is relatively young, the
economic contraction associated with lockdowns could potentially lead to 1.76 children’s lives being lost
for every covid-19 fatality averted, probably because wellbeing suffers as incomes decline.
Research is more divided over the second uncertainty: the benefit of lockdowns, or the extent to which
they reduce the spread of, and deaths from, covid-19. The fact that, time and again, the imposition of a
lockdown in a country was followed a few weeks later by declining cases and deaths might appear to
settle the debate. That said, another recent nber paper failed to find that countries or American states
that were quick to implement shelter-in-place policies had fewer excess deaths than places which were
slower to act. A paper published in the Proceedings of the National Academy of Sciences, a scientific
journal, by Christopher Berry of the University of Chicago and colleagues, cannot find “effects of [shelterin-place] policies on disease spread or deaths”, but does find “small, delayed effects on unemployment”.
Is the price right?
Running through all this is the final uncertainty, over putting a price on life. That practice might seem
cold-hearted but is necessary for lots of public policies. How much should governments pay to make sure
that bridges don’t collapse? How should families be compensated for the wrongful death of a relative?
There are different ways to calculate the value of a statistical life (vsl). Some estimates are derived from
the extra compensation that people accept in order to take certain risks (say, the amount of extra pay for
those doing dangerous jobs); others from surveys.
Cost-benefit analyses have become something of a cottage industry during the pandemic, and their
conclusions vary wildly. One paper by a team at Yale University and Imperial College, London, finds that
social distancing, by preventing some deaths, provides benefits to rich countries in the region of 20%
of gdp—a huge figure that plausibly exceeds even the gloomiest estimates of the collateral damage of
lockdowns. But research by David Miles, also of Imperial College, and colleagues finds that the costs of
Britain’s lockdown between March and June 2020 were vastly greater than their estimates of the
benefits in terms of lives saved.
An important reason for the big differences in cost-benefit calculations is disagreement over the vsl.
Many rely on a blanket estimate that applies to all ages equally, which American regulatory agencies
deem is about $11m. At the other extreme Mr Miles follows convention in Britain, which says that the
value of one quality-adjusted life-year (qaly) is equal to £30,000 (which seems close to a vsl of around
£300,000, or $417,000, given how many years of life the typical person dying of covid-19 loses). The
lower the monetary value you place on lives, the less good lockdowns do by saving them.
The appropriate way to value a change in the risk of death or life expectancy is subject to debate. Mr
Miles’s number does, however, look low. In Britain the government’s “end-of-life” guidance allows
treatments that are expected to increase life expectancy by one qaly to cost up to £50,000, points out
Adrian Kent of Cambridge University in a recent paper, and allows a threshold of up to £300,000
per qaly for treating rare diseases. But it may be equally problematic to use the American benchmark of
$11m for covid-19, which disproportionately affects the elderly. Because older people have fewer
expected years left than the average person, researchers may choose to use lower estimates of the vsl.
The best attempt at weighing up these competing valuations is a recent paper by Lisa Robinson of
Harvard University and colleagues, which assesses what happens to the results of three influential costbenefit studies of lockdowns when estimates of the vsl are altered (see chart 2). Adjusting for age can
sharply reduce the net benefits of lockdowns, and can even lead to a result where “the policy no longer
appears cost-beneficial”. Given that these models do not take into account the harder-to-measure costs
of lockdowns—how to price the damage caused by someone not being able to attend a family Christmas,
say, or a friend’s funeral?—the question of whether they were worth it starts to look like more of a tossup.
Once you open the door to making adjustments, things become more complicated still. Research on risk
perception finds that uncertainty and dread over an especially bad outcome, especially one that involves
more suffering before death, mean that people may be willing to pay far more to avoid dying from it.
People appear to value not dying from cancer far more than not dying in a road accident, for instance.
Many went to extraordinary lengths to avoid contracting covid-19, suggesting that they place enormous
value on not dying from that disease. Some evidence suggests that the vsl might need to be increased by
a factor of two or more, writes James Hammitt, also of Harvard, in a recent paper. That adjustment could
make lockdowns look very worthwhile.
The malleability of cost-benefit analysis itself hints at the true answer of whether or not lockdowns were
worth it. The benefit of a saved life is not a given but emerges from changing social norms and
perceptions. What may have seemed worthwhile at the height of the pandemic may look different with
the benefit of hindsight. Judgments over whether or not lockdowns made sense will be shaped by how
society and politics evolve over the coming years—whether there is a backlash against the people who
imposed lockdowns, whether they are feted, or whether the world moves on. ■
Dig deeper
All our stories relating to the pandemic and the vaccines can be found on our coronavirus hub. You can
also listen to The Jab, our podcast on the race between injections and infections, and find trackers
showing the global roll-out of vaccines, excess deaths by country and the virus’s spread
across Europe and America.
A version of this article was published online on June 29th 2021
Per Capita Expenditures
General Govt.
Total Human/Heath Services
Public Safety
Cultural and Recreation
Transportation-Current
Econ Environment
Physical Environment
Total Debt Service
Jacksonville
$
221.61
$
128.95
$ 1,161.28
$
81.92
$
185.81
$
96.12
$
37.12
$
355.06
Tampa+Hillsborough
$
456.62
$
342.66
$
1,380.87
$
243.95
$
297.23
$
156.27
$
88.74
$
204.82
ZipCode Pop
White
Black
Hispanic Median Age Educ Pop
# Bach Degree # Some HS
32202
6523
2505
3578
335
37.8
5093
637
932
32204
7547
4809
1932
471
33.8
5578
1491
396
32205
30305
20928
7220
2571
35.4
21652
3993
1960
32206
16027
3949
11188
706
37.7
11234
978
1692
32207
35488
24404
6019
5763
36.1
24398
4931
1904
32208
30841
5081
24728
700
41.1
21490
1915
3029
32209
34945
1601
32352
1094
34
22620
1356
3735
32210
62048
32843
23394
5268
35.4
41874
5987
4065
32211
35657
19563
13911
4505
32.2
22286
2810
2049
32212
2466
1848
456
477
21.6
552
81
10
32216
38231
25339
7848
5696
37.3
27450
5990
2055
32217
19899
15785
2614
2887
38.5
14384
3392
698
32218
64007
27369
32156
4192
34.8
41430
6718
3202
32219
12685
4546
7533
305
42.4
8928
753
854
32220
12981
9872
2448
276
40.9
8896
1047
898
32221
30900
17576
9754
2276
37
20029
3035
1901
32222
11521
5391
4181
1962
37.3
7601
1081
385
32223
24571
22436
811
1695
47.7
18430
4617
561
32224
44058
35164
3989
5883
34.2
27704
8226
1066
32225
55018
39664
8159
4918
38.4
37474
9311
1585
32226
15667
12007
2270
979
39.5
10955
2528
731
32227
3337
2419
366
530
21.6
892
104
18
32234
5867
5166
387
349
45.9
4384
267
532
32244
59402
29050
20626
7813
35
39713
5998
2863
32246
51589
33701
8047
8192
34.6
36701
8757
2039
32254
13431
4865
7952
763
34.5
8671
441
1553
32256
47943
30431
7971
5935
33.9
34161
10689
910
32257
39000
30081
4877
4164
39.3
27872
6786
1541
32258
34036
24441
3448
2739
35.2
23728
6765
261
32277
32327
16283
13754
3024
33.3
20984
3488
1194
Click on the link to see a map of Jacksonville’s zip codes
https://www.zipdatamaps.com/zipcodes-jacksonville-fl
Tot Households HH Inc 0-24K HH Inc 200K+ Median Inc # HH Renters #HH Owners Rent
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