Lights Out? COVID-19 Containment Policies and Economic Activity
This paper estimates the impact of a differential relaxation of COVID-19 containment policies on aggregate economic activity in India. Following a uniform national lockdown, the Government of India classified all districts into three zones with var...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/604661606761245743/Lights-Out-COVID-19-Containment-Policies-and-Economic-Activity http://hdl.handle.net/10986/34840 |
| Summary: | This paper estimates the impact of a
differential relaxation of COVID-19 containment policies on
aggregate economic activity in India. Following a uniform
national lockdown, the Government of India classified all
districts into three zones with varying containment measures
in May 2020. Using a difference-in-differences approach, the
paper estimates the impact of these restrictions on
nighttime light intensity, a standard high-frequency proxy
for economic activity. To conduct this analysis,
pandemic-era, district-level data from a range of novel
sources are combined -- monthly nighttime lights from global
satellites; Facebookâs mobility data from individual
smartphone locations; and high-frequency, household-level
survey data on income and consumption, supplemented with
data from the Indian Census and the Reserve Bank of India.
The analysis finds that nighttime light intensity in May was
12.4 percent lower for districts with the most severe
restrictions and 1.7 percent lower for districts with
intermediate restrictions, compared with districts with the
least restrictions. The differences were largest in May,
when the different policies were in place, and slowly
tapered in June and July. Restricted mobility and lower
household income are plausible channels for these results.
Stricter containment measures had larger impacts in
districts with greater population density of older
residents, as well as more services employment and bank credit. |
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