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Discussion Paper Details

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Title: Evaluating the Effectiveness of Policies Against a Pandemic

Author(s): Christian Alem�n, Christopher Busch, Alexander Ludwig and Ra�l Santaeul�lia-Llopis

Publication Date: October 2020

Keyword(s): COVID-19, identification, Macroeconomics, Pandemic, Policy Effects, Stages and Stay-Home

Programme Area(s): Labour Economics, Macroeconomics and Growth, Monetary Economics and Fluctuations and Public Economics

Abstract: We develop a novel empirical approach to identify the effectiveness of policies against a pandemic. The essence of our approach is the insight that epidemic dynamics are best tracked over stages, rather than over time. We use a normalization procedure that makes the pre-policy paths of the epidemic identical across regions. The procedure uncovers regional variation in the stage of the epidemic at the time of policy implementation. This variation delivers clean identification of the policy effect based on the epidemic path of a leading region that serves as a counterfactual for other regions. We apply our method to evaluate the effectiveness of the nationwide stay-home policy enacted in Spain against the Covid-19 pandemic. We find that the policy saved 15.9% of lives relative to the number of deaths that would have occurred had it not been for the policy intervention. Its effectiveness evolves with the epidemic and is larger when implemented at earlier stages.

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Bibliographic Reference

Alem�n, C, Busch, C, Ludwig, A and Santaeul�lia-Llopis, R. 2020. 'Evaluating the Effectiveness of Policies Against a Pandemic'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15390