USING A NATURAL EXPERIMENT TO ASSESS THE SHORT-RUN COSTS AND EFFECTIVENESS OF INTENSIFYING SOCIAL ISOLATION AT THE BEGINNING OF THE COVID-19 PANDEMIC
DOI:
https://doi.org/10.38116/ppp68art5Palavras-chave:
covid-19, social isolation, difference in differences, cost-benefit analysisResumo
After imposing restrictive measures when the first cases of covid-19 were identified in the state, the government of Rio Grande do Sul, through State Decree No. 55,184 of April 15, 2020, gave discretionary power to the municipalities to adopt or abolish restrictive measures to economic activities, in particular, related to the retail of goods and services with face-to-face customer service. This article uses the natural experiment created by this decree to evaluate the costs and benefits of intensifying social isolation when there is no identified outbreak. To achieve this goal, this article uses sales information with electronic invoices and covid-19 cases, hospitalizations, and deaths to estimate models of difference in differences with weekly panel data from March 22 to May 16, 2020. The results show that the short-run economic costs of intensifying social isolation were around BRL 889 thousand per day. At the same time, the short-run benefits of reducing cases, hospitalizations, and deaths caused by covid-19 were small and not statistically significant. Therefore, the article concludes that, without an outbreak, the economic costs of intensifying social isolation were relevant and consistent. At the same time, their benefits in terms of health outcomes were small and uncertain.
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