The impact of COVID-19 restrictions on economic activity: Evidence from the Italian regional system

Brian Cepparulo
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Brian Cepparulo: University of Greenwich

French Stata Users' Group Meetings 2022 from Stata Users Group

Abstract: Nonpharmaceutical interventions adopted by governments to halt the spread of Sars-Cov2 are thought to have nontrivial consequences for the economy. The purpose of this presentation is to estimate the economic impact of nonpharmaceutical interventions in Italy by taking advantage of timing differences in their implementation across regions. To achieve this, I estimate one-way and two-way fixed effects models on a large sample of Italian provinces. I also isolate a set of well-defined natural experiments in which one region goes from a lower to a higher tier of restrictions, while a neighboring region remains in the lower tier, for which we can estimate difference-in-differences and continuous treatment models. Moreover, in order to observe whether the impact of restrictions has changed over time, I split the sample around December 2020 and replicate the analysis in each subsample. My case studies indicate that an Italian province moving from tier 2 to tier 3 in the system of restrictions can expect a fall in mobility of between 12 and 18 percentage points. Thus, I provide evidence of the negative effects of nonpharmaceutical interventions on economic activity. Finally, I provide some evidence that the effectiveness of nonpharmaceutical interventions in reducing mobility is likely to reduce over time, which has important policy implications.

Date: 2022-08-01
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Persistent link: https://EconPapers.repec.org/RePEc:boc:fsug22:15

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