Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020

Austan Goolsbee () and Chad Syverson
Additional contact information
Austan Goolsbee: University of Chicago - Booth School of Business; NBER

No 2020-80, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: The collapse of economic activity in 2020 from COVID-19 has been immense. An important question is how much of that collapse resulted from government-imposed restrictions on activity versus people voluntarily choosing to stay home to avoid infection. This paper examines the drivers of the economic slowdown using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries. Comparing consumer behavior over the crisis within the same commuting zones but across state and county boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the massive changes to consumer behavior (and that tracking county-level policy conditions is significantly more accurate than using state-level policies alone). While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 percentage points of this. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly influenced by the number of COVID deaths reported in the county; and showed a clear shift by consumers away from busier, more crowded stores toward smaller, less busy stores in the same industry. States that repealed their shutdown orders saw symmetric, modest recoveries in activity, further supporting the small estimated effect of policy. Although the shutdown orders had little aggregate impact, they did have a significant effect in reallocating consumer activity away from “nonessential†to “essential†businesses and from restaurants and bars toward groceries and other food sellers.

Pages: 36 pages
Date: 2020
New Economics Papers: this item is included in nep-cwa
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (320)

Downloads: (external link)
https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_202080.pdf (application/pdf)

Related works:
Journal Article: Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020 (2021)
Working Paper: Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020 (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bfi:wpaper:2020-80

Access Statistics for this paper

More papers in Working Papers from Becker Friedman Institute for Research In Economics Contact information at EDIRC.
Bibliographic data for series maintained by Toni Shears ( this e-mail address is bad, please contact ).