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The contagion externality of a superspreading event: The Sturgis Motorcycle Rally and COVID‐19

Dhaval Dave, Drew McNichols and Joseph J. Sabia

Southern Economic Journal, 2021, vol. 87, issue 3, 769-807

Abstract: Large in‐person gatherings of travelers who do not socially distance are classified as the “highest risk” for COVID‐19 spread by the Centers for Disease Control and Prevention (CDC). From August 7–16, 2020, nearly 500,000 motorcycle enthusiasts converged on Sturgis, South Dakota for its annual rally in an environment without mask‐wearing requirements or other mitigating policies. This study is the first to explore this event's public health impacts. First, using anonymized cell phone data, we document that foot traffic at restaurants/bars, retail establishments, and entertainment venues rose substantially at event locations. Stay‐at‐home behavior among local residents fell. Second, using a synthetic control approach, we find that the COVID‐19 case rate increased substantially in Meade County and in the state of South Dakota in the month following the Rally. Finally, using a difference‐in‐differences model to assess nationwide spread, we find that following the Sturgis event, counties outside of South Dakota that contributed the highest inflows of rally attendees experienced a 6.4–12.5% increase in COVID‐19 cases relative to counties without inflows. Our findings highlight that local policy decisions assessing the tradeoff between local economic benefits and COVID‐19 health costs will not be socially optimal in the presence of large contagion externalities.

Date: 2021
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Handle: RePEc:wly:soecon:v:87:y:2021:i:3:p:769-807