EconPapers    
Economics at your fingertips  
 

The Cost of Staying Open: Voluntary Social Distancing and Lockdowns in the US

Adam Brzezinski, David Van Dijcke and Valentin Kecht

No 910, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: In combating the spread of COVID-19, some governments have been reluctant to adopt lockdown policies due to their perceived economic costs. Such costs can, however, arise even in the absence of restrictive policies, if individuals’ independent reaction to the virus slows down the economy. This paper ï¬ nds that imposing lockdowns leads to lower overall costs to the economy than staying open. We combine detailed location trace data from 40 million mobile devices with difference-in-differences estimations and a modiï¬ cation of the epidemiological SIR model that allows for societal and political response to the virus. In that way, we show that voluntary reaction incurs substantial economic costs, while the additional economic costs arising from lockdown policies are small compared to their large beneï¬ ts in terms of reduced medical costs. Our results hold for practically all realistic estimates of lockdown efficiency and voluntary response strength. We quantify the counterfactual costs of voluntary social distancing for various US states that implemented lockdowns. For the US as a whole, we estimate that lockdowns reduce the costs of the pandemic by 1.7% of annual GDP per capita, compared to purely voluntary responses. Revised September 2020

Keywords: COVID-19; difference-in-differences; SIR model; social distancing; lockdown; big data (search for similar items in EconPapers)
JEL-codes: I12 I18 H12 D04 C33 H51 (search for similar items in EconPapers)
Date: 2020-11-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:fca61569-4b4d-4190-a5ea-90c96fc6c454 (text/html)

Related works:
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:oxf:wpaper:910

Access Statistics for this paper

More papers in Economics Series Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).

 
Page updated 2021-01-25
Handle: RePEc:oxf:wpaper:910