Coronavirus

COVID-19 Lockdowns Reduced Spread but with Costs

ilseu — Thu, 09 Mar 2023 02:22:47 +0000

COVID-19 Lockdowns Reduced Spread but with Costs ilseu Wed, 03/08/2023 - 18:22 More News David Danelski (david.danelski@ucr.edu) | UCR News March 07, 2023

The lockdowns at the beginning of COVID-19 pandemic reduced the spread of infection by an estimated 56%, a recent study has found. If all governors did not issue any lockdowns until April 23, 2020, the number of cases would have been five times higher by April 30, 2020, the study asserts.

But the lockdowns came with economic costs.

Ashish Sood

Specifically, the U.S. lockdowns reduced gross domestic product, or GDP (−5.4%); employment (−2%); customer satisfaction (−2%), and consumer spending (−7.5%) for the next quarter. These impacts, on average, translated to a cost of $27,567 in lower GDP, according to “Lockdown Without Loss? A Natural Experiment of Net Payoffs from COVID-19 Lockdowns,” which is forthcoming in the Journal of Public Policy and Marketing.

The study is the first to capture the tradeoffs of lockdowns, weighing the effectiveness of disease reduction with their economic cost.

“Understanding the true costs and benefits of COVID-19 policies helps policymakers assess the payoff of past decisions and prepares them to navigate future large-scale health crises,” said co-author Ashish Sood, a marketing professor at the University of California, Riverside, and a research fellow at the Center of Global Innovation, University of Southern California.

“By examining the causal effects of state-ordered lockdowns, our research accurately reveals the trade-off: Lockdowns are effective in reducing the spread of the virus, but they come at a measurable cost to the economy and consumers,” added co-author Gerard J. Tellis, Neely Chaired Professor of American Enterprise at the USC Marshall School of Business.

The other authors are Sajeev Nair, assistant professor of marketing at School of Business, University of Kansas, and Nitish Sood, a student at the Medical College of Georgia at Augusta University.

A federal policy to control COVID-19 did not exist in 2020, which allowed state governors to decide when and if to order lockdowns and mask mandates. Mandatory stay-at-home orders were enacted at different times, creating a unique natural experiment that authors exploited to address four issues: their effectiveness, the cost to the economy and consumers, their effects on mask adoption, and why governors varied in ordering them.

Times Square in New York City during the 2020 COVID-19 lockdowns. (Photo/Getty Images)

Notably, lockdowns increased the public’s use of face masks.

“Preventive measures like mask usage and social distancing help reduce the transmission of the disease and the number of sick patients in hospitals,” said Nitish Sood. The study found that lockdowns increased mask usage by 17.9%.

The study highlights how tensions between medical science and behavioral theories have fundamental implications for public policy, management, and consumers. Despite the economic costs, avoiding lockdowns in the belief that consumers would adopt masks may backfire.
“Many experts thought that lockdowns would mitigate the need for masks. However, we found that lockdowns increased mask-wearing probably due to its signaling effect of the urgency of a pandemic,” said Sajeev Nair.

Importantly, the study’s authors show that the spread of the disease had no effect on governors’ decisions, as public health professionals hoped. Rather, the study found that governors were primarily motivated by political affiliation, imitating the policy of states affected earlier, and actions of governors of the same party who acted earlier.

Read the full study in the Journal of Public Policy and Marketing.

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(Header photo: The Santa Monica beach during 2020 COVID-19 lockdowns/Getty Images)

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Ashish Sood

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Pandemic Slows, Headwinds Ease for CA Job Growth

ilseu — Tue, 21 Sep 2021 16:32:47 +0000

Pandemic Slows, Headwinds Ease for CA Job Growth ilseu Tue, 09/21/2021 - 09:32 More News September 17, 2021

According to the September 2021 Beacon Employment Report | CA, California’s labor market continued to expand at a rapid pace in August, with total nonfarm employment in the state growing by 104,300 positions. During August, California accounted for 44% of all jobs added nationally during the month.

104,300 Jobs Added In August

California’s labor market continued to expand at a rapid pace in August, with total nonfarm employment in the state growing by 104,300 positions, according to an analysis released jointly by the UCR School of Business Center for Economic Forecasting & Development and Beacon Economics. During August, California accounted for 44% of all jobs added nationally during the month.

“Two major headwinds for the state’s economy have been eased: the declining spread of COVID-19 cases and the re-opening of schools,” said Taner Osman, Research Manager at the UCR School of Business Center for Economic Forecasting & Development and Beacon Economics. “This paves the way for strong job gains through the end of this year.”

5.3 million Fewer People Employed

Throughout 2021, California (+4.3%) has added jobs at a faster rate than the national economy (3.3%). This trend will continue as the state’s labor market has underperformed the national labor market since the onset of the pandemic. As of August 2021, there were 1.03 million fewer workers employed in California compared to February 2020; total nonfarm employment in the state contracted 5.8% over this time. Nationally, over the same period, the labor market has shrunk by 3.5%, or around 5.3 million jobs.

7.5% Unemployment Rate

California’s unemployment rate edged down to 7.5% in August, compared to 7.6% in July. California’s unemployment rate still remains elevated relative to the 5.4% rate in the United States overall. The state’s labor force also expanded by 55,300 workers during the month, although there are still 450,200 fewer workers in the labor force in the state compared to pre-pandemic levels, a contraction of 2.3%.

The Beacon Employment Report | California is a unique analysis of California’s employment numbers and trends. Each month, they link their econometric predictions to data released by the U.S. Bureau of Labor Statistics and the California Employment Development Department to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data.

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Coronavirus

Business Activity to Hit Pre-Pandemic Levels

ilseu — Wed, 23 Jun 2021 21:26:18 +0000

Business Activity to Hit Pre-Pandemic Levels ilseu Wed, 06/23/2021 - 14:26 More News Victoria Pike Bond June 23, 2021

Business activity in the Inland Empire is in clear-cut recovery mode and will reach pre-pandemic levels by the end of this year, according to the new Inland Empire Business Activity Index released today by the UCR School of Business Center for Economic Forecasting and Development. The analysis estimates that business activity in the region will rise between 6% and 10% through the end of 2021. This projection highlights the resilience of the region’s economy as it emerges from one of the most significant downturns in recent history.

“The Inland Empire, and California overall, are primed for growth,” said Taner Osman, research manager at the Center for Forecasting. “The economic fallout the region suffered throughout the pandemic recession, while considerable, has been erased from many parts of the economy; lagging areas, such as the labor market, are not recovering as quickly as we would like but should be boosted by the accelerated rate of vaccinations.”

The analysis points out that in just the first quarter of 2021, business activity increased at an annualized rate of 7% in the Inland Empire. This compares favorably to the 6.4% growth rate in U.S. GDP during the same period, underscoring the Inland Empire’s relative strength. While part of this faster pace is due to the deeper contraction the region experienced during mandated closures, the rebound demonstrates the ability of local industries to adapt and recover as restrictions were lifted.

Sectors such as logistics, distribution, and warehousing have been central to this recovery. The Inland Empire serves as a hub for goods movement across Southern California, and the surge in e-commerce demand has fueled growth in these industries. Consumer spending, which rebounded strongly as households benefited from stimulus payments and improving public health conditions, has also supported business activity. The report suggests that these factors will continue to provide momentum as the year progresses.

Despite these encouraging signs, the region’s labor market remains the weakest part of the recovery. The Inland Empire lost tens of thousands of jobs in early 2020, and while recovery has been steady, it has not been uniform across sectors. To date, the Inland Empire has recovered 67% of the jobs it lost during the historic declines of early 2020. This compares very favorably to neighboring regions, including Los Angeles, where only 36% of lost jobs have returned, and Orange County, which has regained 47%. Except for January, the Inland Empire has experienced consistent employment growth each month of 2021, suggesting that a full rebound is possible within the near term.

More importantly, the Inland Empire’s workforce has now returned to pre-pandemic levels, signaling renewed confidence among both employers and employees. “With the state and region hitting vaccination targets, confidence is rising, and employment growth should pick up quickly,” said Osman. “With California fully reopened, the Inland Empire is expected to continue adding jobs on a faster track.”

Looking ahead, the Inland Empire is expected to remain a key driver of economic growth in Southern California. Its affordable housing, central location, and strong industrial base position it to attract both businesses and residents seeking opportunities in a post-pandemic economy. The Inland Empire Business Activity Index will continue to monitor these trends, offering insight into how the region adapts to ongoing changes in the national and global economy.

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Taner Osman

UCR News

The Age of the Vaccine Passport

ilseu — Mon, 29 Mar 2021 06:57:57 +0000

The Age of the Vaccine Passport ilseu Sun, 03/28/2021 - 23:57 More News UCR University Communications March 24, 2021

The vaccine passport is coming.

The likelihood of a “passport” being required — or perhaps just requested — for travel, and to return to school and work, seems a certainty. New York state is testing a smartphone app that would verify vaccine status for entry into events. IBM is developing the Digital Health Pass, which would live inside smartphones. President Biden is studying vaccine passports; the airline industry is keen on them. The European Commission is proposing similar digital passports to ease travel, with tourism-dependent countries such as Greece embracing the idea. Meanwhile, even as it works to develop such a passport, the World Health Organization cautioned against requiring them for travel, saying it’s not clear whether vaccinations stop transmission.

We asked six UC Riverside experts across disciplines to address the implications of vaccine passports.

Richard Carpiano

public health expert

“Given the option, nobody would want to have the Diners Club equivalent of a vaccine passport vs. one whose acceptance is more akin to Visa or American Express or, better yet, a U.S. passport that is recognized everywhere.”
— Carpiano

Q: Airline and hospitality industry officials are asking the Biden administration to take the lead on “the vaccine passport.” Various groups and states are working on developing their own passports. Is that sufficient, or is it important that the federal government/CDC take a leading role?

A: Fundamentally, any vaccine passport would need to be more than just a vaccine card — it would need to be recognized proof of one’s vaccination status — recognized, like other travel documents, as legitimate by agencies requesting to see them from U.S. travelers. A key way to ensure that legitimacy is to have such vaccine documentation (whether paper or digital) issued by a government agency. Just as we do not have multiple government agencies and even private vendors issuing travel passports, the same logic should apply to any such vaccine passports. As such, the federal government should take a leading role in the process to develop, produce, and issue such a document.

It is ideal for all parties involved to have a limited number of entities issuing them versus numerous options that, like certain credit cards, might be accepted only in a limited number of locations and thus require people to obtain multiple passports (and take on additional data security risks). Given the option, nobody would want to have the Diners Club equivalent of a vaccine passport versus one whose acceptance is more akin to Visa or American Express or, better yet, a U.S. passport that’s recognized everywhere.

Juliette Levy

digital pedagogy and virtual reality (VR) expert

“People are worried that with the vaccine passport, other personal info will be shared, and that is precisely what blockchain would prevent.”
— Levy

Q: “Blockchain” technology, which encrypts personal data, is vaccine passport proponents’ answer to privacy concerns. Is it enough to address privacy concerns?

A: I think blockchain itself addresses most privacy issues — but I think the issues raised about the vaccine passport are not so much about the passport or the vaccine. After all, while our medical info is private, vaccine distribution isn't. People are currently being vaccinated in large public centers or their cars! I think people are worried that with the vaccine passport, other personal info will be shared, and that is precisely what blockchain would prevent.

Jennifer Syvertsen

medical anthropologist; focus on global health inequities

“While vaccine passports seem attractive in permitting safe travel, there are real ethical concerns.”
— Syvertsen

Q: Critics of vaccine passports are concerned that they will widen the gap between elites and nonelites, and between the Global North and Global South, in access to travel, recreation, and hospitality services, as well as increasing inequality in other ways. Given how uneven the vaccine rollout has been, and how unequally distributed it has been between various countries, this is a valid concern. What can be done to ensure vaccine passports do not exacerbate social inequalities?

A: The pandemic has exacerbated long-standing structural and social inequities to disproportionately sicken, hospitalize, and kill vulnerable groups. We are all eager to return to some semblance of “normal,” and while vaccine passports seem attractive in permitting safe travel, there are real ethical concerns that this will be just another driver of global health inequity.

Globally, wealthy countries have purchased vaccines for their citizens, but it has been estimated that perhaps one-quarter of the world may not have access to any vaccines until 2022. Even within the U.S., the vaccine rollout has struggled to achieve equity; currently, in California, 30% of those vaccinated are white compared to 19% of Latinos and 3% of Blacks, for example. There are real challenges not only with “vaccine hesitancy,” based on justified skepticism of our medical system due to its historically entrenched structural racism and mistreatment of vulnerable populations. However, there are also numerous structural barriers, including access to care, limited trusted information in diverse communities, inaccessible testing sites and transportation issues, inequitable access to technology and the internet for making online appointments, and other challenges. Thus, the privileged of the world would be the first to have access to vaccine passports while others might have to wait for undetermined periods of time to get their passport — if ever.

This opens up a lot of ethical questions and would introduce opportunities for discrimination based on an immunity status, which opens people up to experiencing stigma and discrimination based on a medical condition. These passports would compound inequities along fault lines of gender, race, ethnicity, class, citizenship, and the like. Passports could open people up to being discriminated against and suffering human rights abuses. This places a burden of responsibility upon individuals for vaccination and might obscure the role of the government and public health agencies in ensuring the collective good.

Breaking down global patent monopolies on producing vaccines, investing in initiatives like COVAX, and attention to not only vaccination, but testing, contact tracing, and access to reliable information and health care are needed to address equity issues.

Brandon Brown

epidemiologist

“Any way we can encourage vaccination is a good thing.”
— Brown

Q: How important would the vaccine passport be to jumpstarting the travel and tourism industry? What purpose does the vaccine passport serve in the travel industry if it’s not mandatory?

A: Providing evidence of immunization via something like vaccine passports can help protect the health of the individual traveler, other travelers, employees involved in the travel industry, people in the host country that is being visited for travel and tourism, as well as people in the country of origin of the traveler upon their return. Any way we can encourage vaccination is a good thing, as vaccines are one of the most effective ways to improve health and prevent disease and death.

Ashish Sood

marketing professor who has studied the effectiveness of pandemic lockdowns

“Higher the perceived benefit, stronger the consumers’ urge to adopt the intervention.”
— Sood

Q: Do consumers historically embrace or resist restrictions aimed at protecting public safety?

A: Extant research provides ample evidence that consumers look for standard protocols to enhance public safety, but only when certain conditions are satisfied.

First, the threat is tangible and relatively immediate. In cases where there is debate or lack of sound scientific evidence on the probability of the occurrence a certain negative event, the actions or regulations for public safety are deemed restrictive and there is much higher resistance. Thus, the acceptance of COVID-19 vaccine certifications will be higher in communities where the impact of COVID-19 has been more visible, or the information has been received from sources that are considered more valid.

Second, the intervention aimed at enhancing public safety, e.g., regulating consumer activity (access/movement etc.) based on the COVID-19 vaccine certification is easy to obtain and validate. In some Asian countries, consumers receive QR-coded vaccine certifications digitally transferred on their phones within minutes of receiving the vaccines. These certifications are standardized and consumers learn to recognize these images making it easier to implement it across regions, marketplaces, and industries. In other cases e.g., in the U.S., we still rely on paper certificates that are not standardized making it impossible to implement easily.

Third, the benefit of intervention is clearly and consistently communicated. Examples of such benefits include access to travel, opening of schools, universities, and business establishments etc. Higher the perceived benefit, stronger the consumers’ urge to adopt the intervention.

Sean Jasso

political economist and business ethicist

“A passport policy risks challenging basic liberties of mobility, interstate and international commerce, and privacy.”
— Jasso

Q: Will vaccine passports achieve their intended goal of boosting the economy and slowing infection?

A: If the purpose of passports is to help industries recover from lockdowns by returning to familiar, highly concentrated groups of people to reduce or eliminate the risk of infection from others, then in theory, a passport policy might help achieve this desired outcome. On the other hand, a passport policy risks challenging basic liberties of mobility, interstate and international commerce, and privacy.

The current phenomenon of the government creating lockdowns and assigning industries that are essential or nonessential is an example of such an unprecedented reach that has produced mixed results throughout the world. There is no clear evidence of what method of reducing the contagion has worked best. But with a vaccine in the mix, policymakers now have a clearer path of what normal might look like with large groups in school, airplanes, restaurants, theaters, and offices.

Q: The European Union is set to vote on a “Digital Green Certificate,” a vaccine passport that would allow free travel between EU countries. If the EU adopts this policy and the U.S. doesn’t, what could the effects be on international tourism? And will the proposed passports be useful at all if they are not universally implemented?

A: Creating an interstate commerce vaccine passport is the job of Congress, where the political feasibility is unlikely due to delegated powers among the states and local governments. What is likely, however, is that industries will have the economic will to more accurately test the risks producers and consumers are willing to bear. Industry leaders and their many stakeholders from customers, employees, suppliers, to owners have a wider scope of analysis to regulate from within both domestically and internationally.

What's the right thing to do? We must ask first, what is the purpose of the policy — whether it is from United Airlines or from Congress. As for vaccine passports, I predict certain industries and governments will indeed create incentives to get vaccinated. Whether the incentives become public policy by putting stamps in passport books so people can move about the nation or the world remains to be seen.

The opportunity for more debate, analysis, and discovery is certainly imminent.

^{This Q&A was compiled by Holly Ober, Iqbal Pittalwala, and John Warren of University Communications.}

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