COVID-19 Time-Varying Reproduction Numbers Worldwide: An Empirical Analysis of Mandatory and Voluntary Social Distancing

59 Pages Posted: 14 May 2021

See all articles by Alexander Chudik

Alexander Chudik

Federal Reserve Banks - Federal Reserve Bank of Dallas

M. Hashem Pesaran

affiliation not provided to SSRN

Alessandro Rebucci

Johns Hopkins University - Carey Business School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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Date Written: March 1, 2021

Abstract

This paper estimates time-varying COVID-19 reproduction numbers worldwide solely based on the number of reported infected cases, allowing for under-reporting. Estimation is based on a moment condition that can be derived from an agent-based stochastic network model of COVID-19 transmission. The outcomes in terms of the reproduction number and the trajectory of per-capita cases through the end of 2020 are very diverse. The reproduction number depends on the transmission rate and the proportion of susceptible population, or the herd immunity effect. Changes in the transmission rate depend on changes in the behavior of the virus, reflecting mutations and vaccinations, and changes in people's behavior, reflecting voluntary or government mandated isolation. Over our sample period, neither mutation nor vaccination are major factors, so one can attribute variation in the transmission rate to variations in behavior. Evidence based on panel data models explaining transmission rates for nine European countries indicates that the diversity of outcomes resulted from the non-linear interaction of mandatory containment measures, voluntary precautionary isolation and the economic incentives that governments provided to support isolation. These effects are precisely estimated and robust to various assumptions. As a result, countries with seemingly different social distancing policies achieved quite similar outcomes in terms of the reproduction number. These results imply that ignoring the voluntary component of social distancing could introduce an upward bias in the estimates of the effects of lock-downs and support policies on the transmission rates.

JEL Classification: C4, D0, E7, F6, I12

Suggested Citation

Chudik, Alexander and Pesaran, M. Hashem and Rebucci, Alessandro, COVID-19 Time-Varying Reproduction Numbers Worldwide: An Empirical Analysis of Mandatory and Voluntary Social Distancing (March 1, 2021). Globalization and Monetary Policy Institute Working Paper No. 407, Available at SSRN: https://ssrn.com/abstract=3843802 or http://dx.doi.org/10.24149/gwp407

Alexander Chudik (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Dallas ( email )

2200 North Pearl Street
PO Box 655906
Dallas, TX 75265-5906
United States

M. Hashem Pesaran

affiliation not provided to SSRN

No Address Available

Alessandro Rebucci

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

HOME PAGE: http://carey.jhu.edu/faculty-research/faculty-directory/alessandro-rebucci-phd

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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