Learning from deregulation: The asymmetric impact of lockdown and reopening on risky behavior during COVID‐19

Abstract

During the coronavirus disease 2019 (COVID‐19) pandemic, states issued and then rescinded stay‐at‐home orders that restricted mobility. We develop a model of learning by deregulation, which predicts that lifting stay‐at‐home orders can signal that going out has become safer. Using restaurant activity data, we find that the implementation of stay‐at‐home orders initially had a limited impact, but that activity rose quickly after states' reopenings. The results suggest that consumers inferred from reopening that it was safer to eat out. The rational, but mistaken inference that occurs in our model may explain why a sharp rise of COVID‐19 cases followed reopening in some states.

Restaurant closures during the COVID-19 pandemic: A descriptive analysis

“…This paper contributes to the research above by offering a unique focus on the restaurant industry enabled by establishment-level data. Closely related is the paper by Glaeser et al (2021) studying how imposing and lifting stay-at-home orders can affect restaurant-related activities through consumer learning. Second, this paper expands the research describing factors specifically related to restaurant exit decisions (e.g.…”

Impacts of state COVID‐19 reopening policy on human mobility and mixing behavior

“…By June 1, 2020, all states took the first actions to resume nonessential business activity. Glaeser et al (2021) introduce a model of learning from deregulation into the emerging literature of the COVID-19 pandemic and emphasize one potential indirect effect of lifting the physical distancing restrictions. Specifically, the model predicts that lifting stay-at-home orders can signal that the activities such as restaurant visits are now safe.…”

Risk Perceptions and Private Protective Behaviors: Evidence from COVID-19 Pandemic*

“…Maloney and Taskin 2020 estimate about a 60 pp drop in “voluntary” restaurant reservations and that SIP policies only accounted for 8pp out of this decline. Glaeser et al 2021 find similarly limited impacts of SIPs on restaurants. Goolsbee and Syverson 2021 also conclude that formal restrictions contributed little to the changes in behavior.…”

“…Narrowly, our paper contributes to the rapidly growing literature on the COVID-19 pandemic, and especially the role of private beliefs and government policies in driving behaviors. Studies aimed at measuring the effect of government policies have used either microsimulation models (Davies et al 2020;Ferguson et al 2020;Jarvis et al 2020;Ngonghala et al 2020;Peak et al 2020; or, increasingly, retrospective analyses of policy implementation (Chen et al 2020;Abouk and Heydari 2021;Nguyen et al 2020;Dave et al 2021;Chudik et al 2020;Glaeser et al 2021;Gupta et al 2020;Flaxman et al 2020;Alexander and Karger 2020;Klein, LaRocky, et al 2020;Klein, LaRock, et al 2020;Jacobsen and Jacobsen 2020;Weill et al 2020;Atkeson et al 2020).…”

“…Narrowly, our paper contributes to the rapidly growing literature on the COVID-19 pandemic, and especially the role of private beliefs and government policies in driving behaviors. Studies aimed at measuring the effect of government policies have used either microsimulation models (Davies et al 2020; Ferguson et al 2020; Jarvis et al 2020; Ngonghala et al 2020; Peak et al 2020; Prem et al 2020) or, increasingly, retrospective analyses of policy implementation (Chen et al 2020; Abouk and Heydari 2021; Nguyen et al 2020; Dave et al 2021; Chudik et al 2020; Glaeser et al 2021; Gupta et al 2020; Flaxman et al 2020; Alexander and Karger 2020; Klein, LaRocky, et al 2020; Klein, LaRock, et al 2020; Jacobsen and Jacobsen 2020; Weill et al 2020; Atkeson et al 2020). Several contemporaneous studies have examined risk perceptions during the pandemic, including the relationship between risk perceptions and economic anxieties (Alsan et al 2020; Bordalo et al 2020; Wise et al 2020; Barrios and Hochberg 2020; Fan et al 2020; Dryhurst et al 2020; Galasso et al 2020; Nino et al 2021; Reiter and Katz 2021; Akesson et al 2020; Fetzer et al 2021).…”