Evaluating the Effectiveness of Policies Against a Pandemic
36 Pages Posted: 25 Nov 2020
Date Written: 2020
We develop a novel empirical approach to identify the eﬀectiveness of policies against a pandemic. The essence of our approach is the insight that epidemic dynamics are best tracked over stages, rather than over time. We use a normalization procedure that makes the pre-policy paths of the epidemic identical across regions. The procedure uncovers regional variation in the stage of the epidemic at the time of policy implementation. This variation delivers clean identiﬁcation of the policy eﬀect based on the epidemic path of a leading region that serves as a counterfactual for other regions. We apply our method to evaluate the eﬀectiveness of the nationwide stay-home policy enacted in Spain against the Covid-19 pandemic. We ﬁnd that the policy saved 15.9% of lives relative to the number of deaths that would have occurred had it not been for the policy intervention. Its eﬀectiveness evolves with the epidemic and is larger when implemented at earlier stages.
Keywords: Macroeconomics, Pandemic, Stages, Covid-19, Stay-Home, Policy Eﬀects, Identiﬁcation
JEL Classification: E01, E22, E25
Suggested Citation: Suggested Citation