Working Paper: NBER ID: w27650
Authors: Edward L. Glaeser; Ginger Zhe Jin; Benjamin T. Leyden; Michael Luca
Abstract: During the COVID-19 pandemic, states issued and then rescinded stay-at-home orders that restricted mobility. We develop a model of learning by deregulation, which predicts that lifting stay-at-home orders can signal that going out has become safer. Using restaurant activity data, we find that the implementation of stay-at-home orders initially had a limited impact, but that activity rose quickly after states’ reopenings. The results suggest that consumers inferred from reopening that it was safer to eat out. The rational, but mistaken inference that occurs in our model may explain why a sharp rise of COVID-19 cases followed reopening in some states.
Keywords: COVID-19; Deregulation; Consumer Behavior; Lockdown; Reopening
JEL Codes: D8; I18; K0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stay-at-home orders (H76) | restaurant visits (Z31) |
| reopening orders (C69) | restaurant visits (Z31) |
| reopening orders (C69) | consumer behavior (D19) |
| reopening orders (C69) | misinterpretation of safety (J28) |
| misinterpretation of safety (J28) | increased demand (J23) |
| reopening orders (C69) | COVID-19 cases (Y10) |
| reopening orders and political affiliations (D72) | restaurant visits (Z31) |