Inflation – extra burden and relief for family households
Calculations on inflation-related additional private household expenditure and the work of the Federal Government's relief package.
After a ten-year period of growth, the German economy contracted by 4.9 percent during the corona pandemic in 2020. SARS-CoV-2 virus tests are designed to break the chain of infection and reduce the spread of the virus. Among other things, the aim is to enable more economic, social and cultural activity, reduce the burden on the health system, and prevent deaths. Both PCR and antigen rapid tests therefore make an important contribution to reducing the impact of the corona pandemic on the economy, health care, and society.
Until now the resulting benefits of testing for the economy and the health care system could only be assessed qualitatively. Roche commissioned Prognos to analyse the quantitative impact of testing.
The impact of testing on the nation-wide occurrence of infection and the reduction of the negative effects of the pandemic was derived from scientific literature. However, these derived effects are uncertain, as they depend on factors such as time period, region, and test setting. Therefore, three different reduction effects of tests were considered: medium, low, and high effect. The differences between the calculations are due to different assumptions about the decrease in the incidence of infection due to testing. The quantification was based on the following two questions:
The period between April 2020 and September 2021 was considered, as all relevant data were available for this period at the time of modelling. This was a phase when vaccines were not yet available for everybody. The infection process during this period was largely dominated by the Alpha and later the Delta variant of the coronavirus. Later emerging or completely new variants such as Omicron show new dynamics and routes of infection and may influence the reliability of previous (rapid) tests. These variants were not considered in the calculations.
In the "mean effect" calculation we assume a reduction of infection by 40 percent through corona tests. As a result, between April 2020 and September 2021, testing prevented around 2.8 million infections in Germany and avoided longer lockdowns. This avoided a 36.5 billion euros fall in gross domestic product (almost 0.8 percent of the total GDP over the period). At the same time, an estimated 62,000 deaths and 274,000 hospital admissions (including 84,000 admissions to intensive care) were avoided. This led to considerable relief for the health care system and cost savings of at least 2.8 billion euros for inpatient treatments.
In the "low effect" calculation, we assume a reduction of infection of 20 percent and in the "high effect" calculation 70 percent. The overall economic benefit of testing is 19 billion euros in the minimum scenario and around 50 billion euros in the maximum scenario. The number of avoided infections ranges from 1.1 million in the minimum scenario to 9.9 million in the maximum scenario. As a result, costs for inpatient treatments could be avoided at a minimum of 1 billion euros and a maximum of 9.8 billion euros.
The benefits of corona testing on the national economy and the healthcare system were also analysed for Roche Switzerland in another study.
Results of the study (PDF, in German)
Dr Andreas Sachs, Eva Willer, Heiko Burret, Dr Michael Böhmer
Chief Economist, Head of Corporate Solutions
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