The Impact of Corona Populism: Empirical Evidence from Austria and Theory

GSC Discussion Paper Series No. 24

Covid Economics Vol. 63

41 Pages Posted: 1 Jan 2021 Last revised: 16 Jun 2021

See all articles by Patrick Mellacher

Patrick Mellacher

University of Graz - Graz Schumpeter Centre

Date Written: December 29, 2020

Abstract

I study the impact of opposition politics aimed at downplaying the threat of Covid-19. Exploiting a policy U-turn of a major Austrian right-wing party (FPÖ), I show that Covid-19 deaths per capita are significantly positively correlated with support for the FPÖ only after the turn using panel regressions. Paradoxically, there is no statistically significant correlation with the reported number of infections. I hypothesize that this can be traced back to a self-selection bias in testing, which causes a higher dark figure in FPÖ strongholds. I find empirical support for this hypothesis in individual-level data from a Covid-19 prevalence study showing a much higher share of (undetected) cases among “corona skeptics”. I finally extend the classical SIRD model to incorporate conditional quarantine and heterogeneous mixing of two groups of agents with behavioral differences and explore its partly non-trivial properties using thousands of numerical simulations. This model can explain the puzzling empirics: if the behavioral differences between the two groups are sufficiently different, an increase in the share of “corona skeptics” can cause an increase in the number of deaths without increasing the number of reported infections.

Keywords: pandemic, covid-19, sars-cov2, heterogeneous mixing, sir model, economic epidemiology, political polarization

JEL Classification: H12, H75, I12, I18

Suggested Citation

Mellacher, Patrick, The Impact of Corona Populism: Empirical Evidence from Austria and Theory (December 29, 2020). GSC Discussion Paper Series No. 24, Covid Economics Vol. 63, Available at SSRN: https://ssrn.com/abstract=3757268 or http://dx.doi.org/10.2139/ssrn.3757268

Patrick Mellacher (Contact Author)

University of Graz - Graz Schumpeter Centre ( email )

Universitätsstraße 15/F
Graz, 8010
Austria

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