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Shutting Down to Save Lives: A Regression Discontinuity Analysis of Non-Essential Business Closure

Pérez, A.F., A.M. Pedrazas and A. Gaggero

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: We quantify the efect of the non-essential business closure policy in the Spanish region of Andalusia. Exploiting that municipalities were assigned a two-week closure of the non-essential business on the basis of the exact 14-day infection rate (per 100,000 inhabitants) being above a cut-off value of 1,000, we use a regression discontinuity design to estimate the causal impact of the policy on new COVID-19 cases and deaths. Using weekly administrative data, our estimates suggest that, on average, the policy reduced new COVID-19 cases and deaths by 63 and 1, respectively. Notably, our heterogeneity analysis highlights that while the policy was extremely effective in urban areas, its effect was not statistically different from zero in rural areas, namely, municipalities with population less than 5,000. Our results imply that roughly 700 lives have been saved by this policy. Overall, this study provides compelling evidence that shutting down businesses has been an effective tool to counter the COVID-19 pandemics.

Keywords: COVID-19; non-essential business closure; Spain; 14-day infection rate; infection; mortality; regression discontinuity (search for similar items in EconPapers)
JEL-codes: H12 I1 I18 (search for similar items in EconPapers)
Date: 2023-05
New Economics Papers: this item is included in nep-eur, nep-hea and nep-ure
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