The cost of staying open: voluntary social distancing and lockdowns in the US
In combating the spread of COVID-19, some governments have been reluctant to adopt lockdown policies due to their perceived economic costs. Such costs can, however, arise even in the absence of restrictive policies, if individuals' independent reaction to the virus slows down the economy. This...
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| Format: | Working paper |
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University of Oxford
2020
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| _version_ | 1797105715227131904 |
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| author | Brzezinski, A Van Dijcke, D Kecht, V |
| author_facet | Brzezinski, A Van Dijcke, D Kecht, V |
| author_sort | Brzezinski, A |
| collection | OXFORD |
| description | In combating the spread of COVID-19, some governments have been reluctant to adopt lockdown policies due to their perceived economic costs. Such costs can, however, arise even in the absence of restrictive policies, if individuals' independent reaction to the virus slows down the economy. This paper ?nds that imposing lockdowns leads to lower overall costs to the economy than staying open. We combine detailed location trace data from 40 million mobile devices with di?erence-in-di?erences estimations and a modi?cation of the epidemiological SIR model that allows for societal and political response to the virus. In that way, we show that voluntary reaction incurs substantial economic costs, while the additional economic costs arising from lockdown policies are small compared to their large bene?ts in terms of reduced medical costs. Our results hold for practically all realistic estimates of lockdown e?ciency and voluntary response strength. We quantify the counterfactual costs of voluntary social distancing for various US states that implemented lockdowns. For the US as a whole, we estimate that lockdowns reduce the costs of the pandemic by 1.7% of annual GDP per capita, compared to purely voluntary responses. Revised September 2020 |
| first_indexed | 2024-03-07T06:51:18Z |
| format | Working paper |
| id | oxford-uuid:fca61569-4b4d-4190-a5ea-90c96fc6c454 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T06:51:18Z |
| publishDate | 2020 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:fca61569-4b4d-4190-a5ea-90c96fc6c4542022-03-27T13:22:28ZThe cost of staying open: voluntary social distancing and lockdowns in the USWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:fca61569-4b4d-4190-a5ea-90c96fc6c454Bulk import via SwordSymplectic ElementsUniversity of Oxford2020Brzezinski, AVan Dijcke, DKecht, VIn combating the spread of COVID-19, some governments have been reluctant to adopt lockdown policies due to their perceived economic costs. Such costs can, however, arise even in the absence of restrictive policies, if individuals' independent reaction to the virus slows down the economy. This paper ?nds that imposing lockdowns leads to lower overall costs to the economy than staying open. We combine detailed location trace data from 40 million mobile devices with di?erence-in-di?erences estimations and a modi?cation of the epidemiological SIR model that allows for societal and political response to the virus. In that way, we show that voluntary reaction incurs substantial economic costs, while the additional economic costs arising from lockdown policies are small compared to their large bene?ts in terms of reduced medical costs. Our results hold for practically all realistic estimates of lockdown e?ciency and voluntary response strength. We quantify the counterfactual costs of voluntary social distancing for various US states that implemented lockdowns. For the US as a whole, we estimate that lockdowns reduce the costs of the pandemic by 1.7% of annual GDP per capita, compared to purely voluntary responses. Revised September 2020 |
| spellingShingle | Brzezinski, A Van Dijcke, D Kecht, V The cost of staying open: voluntary social distancing and lockdowns in the US |
| title | The cost of staying open: voluntary social distancing and lockdowns in the US |
| title_full | The cost of staying open: voluntary social distancing and lockdowns in the US |
| title_fullStr | The cost of staying open: voluntary social distancing and lockdowns in the US |
| title_full_unstemmed | The cost of staying open: voluntary social distancing and lockdowns in the US |
| title_short | The cost of staying open: voluntary social distancing and lockdowns in the US |
| title_sort | cost of staying open voluntary social distancing and lockdowns in the us |
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