Did Hawaii Beat the Virus?

T hrough the first 18 months of the pandemic, Hawaii had two-fifths the cases per person and one-fourth the Covid-19 death rate of the country as a whole. My recent study with Phil Kerpen and Stephen Moore ranked the state No. 1 in pandemic health, with Vermont a distant second. But Hawaii also ranked last on the economic score, even after adjusting for the heavy reliance of its economy on tourism. By conventional economic metrics, Hawaii paid a high price for its partial victory over the virus.

Hawaii, of course, is a group of islands far from the world’s population centers. The state sharply reduced out-of-state visitors by requiring everyone arriving before October 15, 2020, to spend 14 days in quarantine. Tourists caught breaking the rules were arrested. Inter-island travel was also limited.

The chart below shows weekly data from mobile devices dating back to the beginning of 2019 (the pandemic lockdowns began in March 2020). It shows that Hawaiians also stayed home more often than they did before the pandemic, although at close to the same rate as other Americans did, at least through mid 2021. This suggests that Hawaii’s health successes were due to its isolation from the world rather than isolation of Hawaiians from each other.

Hawaii has a long history of delaying its contact with infectious diseases. In The Gifts of Civilization: Germs and Genocide in Hawaii, microbiologist Oswald Bushnell describes how “Hawaiians as a whole were [temporarily] spared the ravages of the great epidemic pestilences that compounded the miseries of so many peoples in the rest of the world . . . bubonic plague, cholera, typhoid fever . . . tuberculosis, leprosy, typhus fever, yellow fever, poliomyelitis, smallpox, measles, influenza, malaria, yaws, rabies.” However, Hawaii’s eventual contact with the rest of the world, especially in the 19th century, coincided with a 90 percent decline in its native population.

One could reasonably expect this time to be different. With Covid vaccines and treatments being rapidly developed, anyone who could delay getting the disease could hope to significantly increase chances of survival. Indeed, as of last week, two-thirds of Hawaii’s cumulative cases had occurred in the Omicron era (which I define to be November 2021 or later) as compared with just 43 percent for the nation as a whole. During that period, Hawaii was reporting more cases per person than the rest of the country, but the case-fatality rate was significantly lower than it had been earlier in the pandemic. Even if Hawaii eventually catches up in terms of cumulative cases per person, the delay appears to have prevented about 2,300 deaths from Covid-19.

At the same time, Hawaii’s economy has been depressed. Its employment through two years of pandemic was 14 percent below previous levels, five percentage points of which I estimate is due to the tourism intensity of its economy.

Of course, the economy was depressed elsewhere in the U.S. (about 5 percent) where isolation was unable to delay Covid cases to the extent that Hawaii did. That leaves a 4 percent depression potentially attributable to Hawaii’s unusual prevention efforts. The cost over two years of the those four points is about $20,000 per household. Even after two years, Hawaiian employment remains depressed ten percent with no sign of edging upward in the near term. A third year of economic depression could easily bring the “economic” total to $30,000 per household, or $15 billion in the aggregate.

Another baseline for assessing the economic cost of Hawaii’s behavior is Florida’s approach of welcoming visitors, keeping schools open, etc. Considering the age and health status of its population as of 2019, Florida ultimately had mortality at the U.S. average, yet its employment was depressed less than 3 percent. The Florida baseline puts the cost of Hawaii’s approach at $23 billion in the aggregate.

The economic depression itself is deadly. Hawaii has been losing an additional 27 people per month due to abnormal rates of death from drugs, alcohol, homicide, diabetes, and heart conditions. Through mid 2021, these excess deaths have occurred at similar per capita rates throughout the U.S., which is perhaps unsurprising given the similarity in stay-at-home rates over that period. However, my chart and other economic data suggest Hawaii to be about a year late in getting back to normal, which might mean an additional 300 or so deaths from non-Covid causes.

Thus, Hawaii’s delayed contact with Covid-19 may have avoided a net 2,000 premature deaths at a cost of $15 billion to $23 billion, or about $8 million to $11 million each. That price is similar to the $10 million value of a statistical life (VSL) that informs government regulatory decisions. This VSL amount is based on observations of how individuals trade off money and mortality risk in their own lives, which would tend to show values closer to $2 million to $4 million for individuals already near the end of life, as many Covid decedents were.

This calculus suggests that Hawaii overpaid somewhat to delay its contact with Covid. The implication is that people would leave Hawaii, especially in 2021 and 2022 when the state was locked down more than the U.S. average, because they would rather live a more normal life even if it meant facing a somewhat greater health risk from the virus. Alternatively, individuals who especially valued Hawaii’s approach (or just were looking for a tropical location for their remote work) could have moved there, enduring the 14-day quarantine for many months of added safety, especially in 2020 when the state was more like the rest of the country.

According to Census Bureau population data, between July 2019 and July 2020, Hawaii’s population increased more than it had in its history as a state. The next year, its population decreased the most while Americans moved to Florida, Idaho, and other states that offered more freedom.