When the Lights Go Out: The Economic Impacts of Covid-19 on Cities Globally

Amjad Khan, Hogeun Park, Mark Roberts and Putu Sanjiwacika Wibisana

No 10189, Policy Research Working Paper Series from The World Bank

Abstract: This paper uses high-frequency nighttime time lights data to estimate the impacts of the Covid-19 crisis on economic activity during the first year of the pandemic for a global sample of 2,800 cities, covering a total population of 2.5 billion people. Activity is found to be negatively affected by both the spread of the virus and the imposition of nonpharmaceutical interventions, but the negative impacts of the spread are large compared to those of nonpharmaceutical interventions. Large differences in city trajectories are also observed. Cities in low- and middle-income countries faced a significantly larger overall loss of economic activity compared to those in high-income countries. Additionally, cities with higher population densities are found to be more resilient in the face of the global shock as compared to less dense ones, but this difference is only observed in low- and middle-income countries. Taken together, the findings suggest that the Covid-19 crisis gave rise to divergence in urban economic trajectories, both across and within countries.

Date: 2022-09-21
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