Individual Behavior and Policy Response in Times of a Pandemic

Robert Sonora and Josip Tica

No 2402, EFZG Working Papers Series from Faculty of Economics and Business, University of Zagreb

Abstract: This paper presents a comprehensive analysis of the intricate dynamics between policy stringency, human behavior, and pandemic outcomes during the COVID-19 crisis. Drawing inspiration from the ’Taylor rule’, we develop and estimate a theoretical C-SI (Cases - Stringency Index) model, providing policymakers with an intuitive framework to assess the efficacy of economic and health policies enacted in response to the pandemic. Our C-SI model considers the interplay between formal stringency measures and individual behaviors, recognizing the nuanced factors influencing decisions to adhere to restrictions. Through rigorous theoretical development and empirical testing using a three-stage least squares (3SLS) approach we investigate the endogenous interaction between policy instruments, individual behavior, and pandemic outcomes. Our results underscore the significant influence of public interest in COVID-related topics, or the ”fear factor,” on individual behavior, suggesting that this factor rivals/complement formal stringency measures in shaping behavior. We identify a clear trade-off between economic and health outcomes and we observe a nonlinear relationship between stringency and mobility, indicating that changes in stringency measures do not consistently correlate with changes in behavior. Our analysis reveals no evidence of stringency policy endogeneity while we find strong evidence that vaccination rates exert a strong influence on policymakers across all analyzed states.

Keywords: COVID-19; policy effectiveness; policy-maker preferences; endogeneity (search for similar items in EconPapers)
JEL-codes: C22 E70 H75 I12 I18 (search for similar items in EconPapers)
Pages: 43
Date: 2024-05-22
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Persistent link: https://EconPapers.repec.org/RePEc:zag:wpaper:2402

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