Household Expenditures and the Effective Reproduction Number in Japan: Regression Analysis

Hajime Tomura

No 2107-1, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: Daily estimates of the effective reproduction number for new coronavirus based on reporting dates are regressed on real household expenditures per household on eating out, traveling, and apparel shopping, as well as mobility in public transportation, using publicly available daily nationwide data from February 15, 2020, to February 1, 2021 in Japan. The effects of absolute humidity, the declaration of states of emergency, and the year-end and new-year holiday period are controlled through dummy variables. The lagged infectious effect of economic activities due to incubation periods is also taken into account. Estimated regression coeffcients indicate that real household ex- penditures for cafe and bar had larger effects on the effective reproduction number per value of spending than the other types of household expenditures in explanatory vari- ables during the sample period. Thus, a loss of aggregate demand is minimized if the effective reproduction number is lowered by restricting only household consumption of cafe and bar. The posterior means of simulations based on the estimated regression coeffcients, however, imply that even if a self-restraint on packaged domestic travels and an endogenous decline in mobility are taken into account, it will be necessary to cut household consumption of cafe and bar by more than 80% of the 2019 level, in order to keep the e ective reproduction number below one on average.

Keywords: new coronavirus; effective reproduction number; consumption; mobility. (search for similar items in EconPapers)
JEL-codes: E21 I18 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2021-05
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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