Free DP Download 05 November 2020 - EVIDENCE THAT THE UK'S EAT-OUT-TO-HELP-OUT SCHEME CONTRIBUTED TO THE SPREAD OF COVID-19

Thursday, November 5, 2020

SUBSIDIZING THE SPREAD OF COVID19: Evidence from the UK's Eat-Out-to-Help-Out scheme
Thiemo Fetzer  
CEPR DP No. 15416 October 2020

A new CEPR study by Thiemo Fetzer documents that a large-scale government subsidy aimed at encouraging people to eat out in restaurants in the wake of the first 2020 Covid-19 wave in the United Kingdom has had a large causal impact in accelerating the subsequent second Covid-19 wave. 

The scheme subsidized 50% off the cost of food and non-alcoholic drinks for an unlimited number of visits in participating restaurants on Mondays-Wednesdays from August 3 to August 31, 2020. Areas with higher take-up saw both, a notable increase in new Covid-19 infection clusters within a week of the scheme starting, and again, a deceleration in infections within two weeks of the program ending. 

Areas that exhibit notable rainfall during the prime lunch and dinner hours on days the scheme was active record lower infection incidence - a pattern that is also measurable in mobility data - and non-detectable on days during which the discount was not available or for rainfall outside the core lunch and dinner hours. A back of the envelope calculation suggests that the scheme is accountable for between 8-17% of all new local infection clusters during that time period.


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