Investigating the epidemiological and economic effects of a third-party certification policy for restaurants with COVID-19 prevention measures

Abstract

This study investigates the effects of a third-party certification policy for restaurants (including bars) that comply with indoor infection-prevention measures on COVID-19 cases and economic activities. We focus on the case of Yamanashi Prefecture in Japan, which introduced a third-party certification policy that accredits facilities, predominantly restaurants, that comply with the designated guidelines. We employ a difference-in-differences design for each of our epidemiological and economic analyses. The estimation results show that, from July 2020 to April 2021, the certification policy reduced the total number of new infection cases by approximately 45.3% (848 cases), while increasing total sales and the number of customers per restaurant by approximately 12.8% (3.21 million Japanese yen or $30,000) and 30.3% (2909 customers), respectively, compared to the non-intervention scenarios. The results suggest that a third-party certification policy can be an effective policy to mitigate the trade-off between economic activities and infection prevention during a pandemic, especially when effective vaccines are not widely available.