Analysis of the Lockdown Effects on the Economy, Environment, and COVID-19 Spread: Lesson Learnt from a Global Pandemic in 2020

Woraphon Yamaka, Siritaya Lomwanawong, Darin Magel and Paravee Maneejuk ()
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Woraphon Yamaka: Center of Excellence in Econometrics, Chiang Mai University, Chiang Mai 50200, Thailand
Siritaya Lomwanawong: Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Darin Magel: Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Paravee Maneejuk: Center of Excellence in Econometrics, Chiang Mai University, Chiang Mai 50200, Thailand

IJERPH, 2022, vol. 19, issue 19, 1-21

Abstract: Lockdown policies have been implemented to reduce COVID-19 transmission worldwide. However, the shutdown of activities has resulted in large economic losses, and it has been widely reported that lockdown measures have resulted in improved air quality. Therefore, many previous studies have attempted to investigate the impacts of the COVID-19-induced lockdowns on the economy, environment, and COVID-19 spread. Nevertheless, the heterogeneity among countries worldwide in the economic, environmental, and public health aspects and the spatial effects of decomposition have not been well investigated in the existing related literature. In this study, based on the cross-sectional data of 158 countries in 2020 and the proposed nonlinear simultaneous spatial econometric models, we investigate the nonlinear and spatial impacts of the COVID-19-induced lockdowns on the economy, environment, and COVID-19 spread. The findings show that lockdowns have had statistically significant negative economic impacts and beneficial environmental consequences but no effect on COVID-19 spread. Noteworthily, this study also found the length of lockdown periods to affect the three domains of interest differently, with a piece of empirical evidence that the imposition of lockdowns for more than 31 days a year could result in economic impairments but contribute to environmental improvements. Lockdowns were shown to have substantially reduced PM2.5 not only in the countries that imposed the measures but also indirectly in the neighboring countries as a spatial spillover effect.

Keywords: COVID-19; economy; environment; lockdown; spatial spillover; nonlinear impact (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
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