Soaring COVID-19 cases are forcing government officials to confront a critical question: Should they lock down the economy further?
Whether to curb activities like indoor dining might seem like a simple choice, but the decision to ease restrictions can send a powerful public health message. In fact, Harvard University research suggests that reopening restaurants last spring, shortly after the pandemic’s first wave, may have led some people to assume that eating out was safe—despite the now-documented links between indoor dining and COVID-19 infections.
“When the government eases restrictions, they are also signaling to people that it might be safer to go out now,” says Michael Luca, the Lee J. Styslinger III Associate Professor of Business Administration at Harvard Business School.
Policymakers trying to avoid draconian lockdowns—and thinking ahead to eventually loosening restrictions—may need to refine their outreach to a pandemic-weary public, especially when it comes to high-risk activities, such as indoor dining. As vaccine hopes and holiday loneliness make distancing harder, consumers will need more nuanced information to make better choices.
"There’s an enormous appetite, particularly among younger Americans, to reconnect and live their lives."
“There’s an enormous appetite, particularly among younger Americans, to reconnect and live their lives," says Edward Glaeser, the Fred and Eleanor Glimp Professor of Economics at Harvard University. “If my state is open, I might interpret that to mean that it’s safe.”
Luca and Glaeser teamed with University of Maryland Professor Ginger Zhe Jin and Benjamin T. Leyden, an assistant professor at Cornell University. They detailed their findings in Learning from Deregulation: The Asymmetric Impact of Lockdown and Reopening on Risky Behavior During COVID-19, a National Bureau of Economic Research Working Paper released in August.
Lessons from the pandemic’s first wave
News of a deadly virus hitting the United States was enough to keep diners home in early March, even before government officials started ordering restaurants to close. Sales at restaurants—one of the hardest-hit industries in the US—fell by 30 percent in March and another 34 percent in April, according to the Census Bureau.
This led some policymakers and economists to conclude that the lockdowns had little bite, and that fear of COVID-19 was the main factor keeping people home. This hypothesis was tested when lockdown orders expired, and restaurants started reopening late spring. Sales nationally rebounded by 31 percent in May and 27 percent in June as diners returned in droves, even as COVID-19 cases started to skyrocket.
Luca, Glaeser, and their colleagues found striking trends as they looked closer at dining patterns. The team analyzed almost six months of data from the foot traffic analytics firm SafeGraph to gauge how many people were leaving their homes, how often they were venturing out, and where they were going. A data sharing partnership with the online review platform Yelp helped the researchers evaluate consumers’ interest in dining at restaurants as well as ordering food for delivery and takeout.
The team found that:
- People across the US had largely stopped eating in restaurants by March 19, when California issued the first stay-at-home order. COVID-19 fears were keeping diners home.
- Restaurant visits spiked immediately when states allowed restaurants to offer in-person dining again. However, restaurant activity remained lower than pre-COVID levels.
- Restaurant demand after lockdowns climbed fastest in areas where residents were more likely to identify as Republican. Right-leaning areas were more willing to dine out, even indoors, perhaps because people who supported GOP candidates perceived infection risk to be lower, as other research has found.
The pattern highlights the challenge of getting lockdowns and reopenings right: When governments allowed restaurants to reopen, some people interpreted that message to mean that dining out was safe again. But months into the pandemic, with the US alone logging more than 150,000 new infections a day since early December, the consequences of such murky messaging could be dire.
“Policymakers should be aware that there’s an informational component to these types of regulations,” Luca says. “When governments ease restrictions, they’re not just allowing more activity—they could also be encouraging activity by signaling that it is safe to get back out.”
Letting freedom ring (safely)
Since the start of the pandemic, people have been making decisions with limited data about questions as basic as whether to get a haircut and as complex as whether to send children to school. Safety guidelines continue to evolve as scientists learn more about the virus and government leaders grapple with changing conditions.
“To be fair, a lot of this comes from the fact that policymakers don’t actually know [exactly how to respond],” Glaeser says. “It’s not like the medical community coalesced on this.”
As government leaders weigh new containment measures, Glaeser says that emphasizing an activity’s health risks might encourage compliance better than imposing blanket restrictions.
“If the opening up messaging was, ‘Yes, we will allow you to do this because we respect individual freedom, but you’re taking your life into your own hands,’ I think that would have led to a very different outcome,” Glaeser says.
"There’s an urgent need for data and evidence to help guide the decisions leaders are grappling with."
In a perfect world, there would be something akin to the health inspection ratings that some cities assign to restaurants, a simple gauge that helps people size up the exposure risk of different activities, Luca says. Easy-to-understand risk information—to the extent that it’s feasible—could complement the ongoing and evolving restrictions, and empower people to own their actions, including any consequences.
Luca and Glaeser are continuing to dig into the pandemic’s repercussions through this project as well as ongoing efforts with HBS professors Zoe B. Cullen and Christopher T. Stanton that study everything from small business aid to the future of remote work. The team is motivated to use research to inform business and policy and to shed light on how COVID-19 might reshape city life and the business ecosystem.
“As business and policy leaders try to navigate the crisis created by the pandemic, there’s an urgent need for data and evidence to help guide the decisions leaders are grappling with,” Luca says.
About the Author
Danielle Kost is the editor-in-chief of Harvard Business School Working Knowledge.
[Image: andresr]
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