Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia
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Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia. / Sheridan, Adam; Andersen, Asger Lau; Hansen, Emil Toft; Johannesen, Niels.
I: Proceedings of the National Academy of Sciences of the United States of America, Bind 117, Nr. 34, 25.08.2020, s. 20468-20473.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia
AU - Sheridan, Adam
AU - Andersen, Asger Lau
AU - Hansen, Emil Toft
AU - Johannesen, Niels
N1 - This article contains supporting information online at https://www.pnas.org/lookup/suppl/doi:10.1073/pnas.2010068117/-/DCSupplemental.
PY - 2020/8/25
Y1 - 2020/8/25
N2 - This paper uses real-time transaction data from a large bank in Scandinavia to estimate the effect of social distancing laws on consumer spending in the coronavirus 2019 (COVID-19) pandemic. The analysis exploits a natural experiment to disentangle the effects of the virus and the laws aiming to contain it: Denmark and Sweden were similarly exposed to the pandemic but only Denmark imposed significant restrictions on social and economic activities. We estimate that aggregate spending dropped by around 25% (95% CI: 24 to 26%) in Sweden and, as a result of the shutdown, by 4 additional percentage points (95% CI: 3 to 5 percentage points [p.p.]) in Denmark. This suggests that most of the economic contraction is caused by the virus itself and occurs regardless of social distancing laws. The age gradient in the estimates suggests that social distancing reinforces the virus-induced drop in spending for low-health-risk individuals but attenuates it for high-risk individuals by lowering the overall prevalence of the virus in the society.
AB - This paper uses real-time transaction data from a large bank in Scandinavia to estimate the effect of social distancing laws on consumer spending in the coronavirus 2019 (COVID-19) pandemic. The analysis exploits a natural experiment to disentangle the effects of the virus and the laws aiming to contain it: Denmark and Sweden were similarly exposed to the pandemic but only Denmark imposed significant restrictions on social and economic activities. We estimate that aggregate spending dropped by around 25% (95% CI: 24 to 26%) in Sweden and, as a result of the shutdown, by 4 additional percentage points (95% CI: 3 to 5 percentage points [p.p.]) in Denmark. This suggests that most of the economic contraction is caused by the virus itself and occurs regardless of social distancing laws. The age gradient in the estimates suggests that social distancing reinforces the virus-induced drop in spending for low-health-risk individuals but attenuates it for high-risk individuals by lowering the overall prevalence of the virus in the society.
KW - Consumer spending
KW - COVID-19
KW - Shutdown |
KW - Social distancing
U2 - 10.1073/pnas.2010068117
DO - 10.1073/pnas.2010068117
M3 - Journal article
C2 - 32747573
AN - SCOPUS:85090075725
VL - 117
SP - 20468
EP - 20473
JO - Proceedings of the National Academy of Sciences of the United States of America
JF - Proceedings of the National Academy of Sciences of the United States of America
SN - 0027-8424
IS - 34
ER -
ID: 252301693