Kenzo Asahi1,2, Eduardo A Undurraga1,3,4,5, Rodrigo Valdés1,5, Rodrigo Wagner6,7. 1. Escuela de Gobierno, Pontificia Universidad Católica de Chile, Santiago, Región Metropolitana, Chile. 2. Centre for Sustainable Urban Development (CEDEUS), Chile. 3. Millennium Nucleus for the Study of the Life Course and Vulnerability (MLIV), Santiago, Chile. 4. Millennium Initiative for Collaborative Research in Bacterial Resistance (MICROB-R), Santiago, Chile. 5. Research Center for Integrated Disaster Risk Management (CIGIDEN), Santiago, Chile. 6. Business School, Universidad Adolfo Ibáñez, Santiago, Chile. 7. Growth Lab, Center for International Development, Harvard, Cambridge, Massachusetts, USA.
Abstract
BACKGROUND: Governments worldwide have implemented large-scale non-pharmaceutical interventions, such as social distancing or school closures, to prevent and control the growth of the COVID-19 pandemic. These strategies, implemented with varying stringency, have imposed substantial social and economic costs to society. As some countries begin to reopen and ease mobility restrictions, lockdowns in smaller geographic areas are increasingly considered an attractive policy intervention to mitigate societal costs while controlling epidemic growth. Nevertheless, there is a lack of empirical evidence to support these decisions. METHODS: Drawing from a rich data set of localized lockdowns in Chile, we used econometric methods to measure the reduction in local economic activity from lockdowns when applied to smaller or larger geographical areas. We measured economic activity by tax collection at the municipality-level. RESULTS: Our results show that lockdowns were associated with a 10%-15% drop in local economic activity, which is twice the reduction in local economic activity suffered by municipalities that were not under lockdown. A three-to-four-month lockdown had a similar effect on economic activity than a year of the 2009 great recession. We found costs are proportional to the population under lockdown, without differences when lockdowns were measured at the municipality or city-wide levels. CONCLUSIONS: Our findings suggest that localized lockdowns have a large effect on local economic activity, but these effects are proportional to the population under lockdown. Our results suggest that epidemiological criteria should guide decisions about the optimal size of lockdown areas since the proportional impact of lockdowns on the economy seems to be unchanged by scale.
BACKGROUND: Governments worldwide have implemented large-scale non-pharmaceutical interventions, such as social distancing or school closures, to prevent and control the growth of the COVID-19 pandemic. These strategies, implemented with varying stringency, have imposed substantial social and economic costs to society. As some countries begin to reopen and ease mobility restrictions, lockdowns in smaller geographic areas are increasingly considered an attractive policy intervention to mitigate societal costs while controlling epidemic growth. Nevertheless, there is a lack of empirical evidence to support these decisions. METHODS: Drawing from a rich data set of localized lockdowns in Chile, we used econometric methods to measure the reduction in local economic activity from lockdowns when applied to smaller or larger geographical areas. We measured economic activity by tax collection at the municipality-level. RESULTS: Our results show that lockdowns were associated with a 10%-15% drop in local economic activity, which is twice the reduction in local economic activity suffered by municipalities that were not under lockdown. A three-to-four-month lockdown had a similar effect on economic activity than a year of the 2009 great recession. We found costs are proportional to the population under lockdown, without differences when lockdowns were measured at the municipality or city-wide levels. CONCLUSIONS: Our findings suggest that localized lockdowns have a large effect on local economic activity, but these effects are proportional to the population under lockdown. Our results suggest that epidemiological criteria should guide decisions about the optimal size of lockdown areas since the proportional impact of lockdowns on the economy seems to be unchanged by scale.
Authors: Jay J Van Bavel; Katherine Baicker; Paulo S Boggio; Valerio Capraro; Aleksandra Cichocka; Mina Cikara; Molly J Crockett; Alia J Crum; Karen M Douglas; James N Druckman; John Drury; Oeindrila Dube; Naomi Ellemers; Eli J Finkel; James H Fowler; Michele Gelfand; Shihui Han; S Alexander Haslam; Jolanda Jetten; Shinobu Kitayama; Dean Mobbs; Lucy E Napper; Dominic J Packer; Gordon Pennycook; Ellen Peters; Richard E Petty; David G Rand; Stephen D Reicher; Simone Schnall; Azim Shariff; Linda J Skitka; Sandra Susan Smith; Cass R Sunstein; Nassim Tabri; Joshua A Tucker; Sander van der Linden; Paul van Lange; Kim A Weeden; Michael J A Wohl; Jamil Zaki; Sean R Zion; Robb Willer Journal: Nat Hum Behav Date: 2020-04-30
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