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The short-term impacts of coronavirus quarantine in São Paulo: The health-economy trade-offs

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  • Alexandre Gori Maia
  • Leticia Marteleto
  • Cristina Guimarães Rodrigues
  • Luiz Gustavo Sereno

Abstract

We analyze the trade-offs between health and the economy during the period of social distancing in São Paulo, the state hardest hit by the COVID-19 pandemic in Brazil. We use longitudinal data with municipal-level information and check the robustness of our estimates to several sources of bias, including spatial dependence, reverse causality, and time-variant omitted variables. We use exogenous climate shocks as instruments for social distancing since people are more likely to stay home in wetter and colder periods. Our findings suggest that the health benefits of social distancing differ by levels of municipal development and may have vanished if the COVID-19 spread was not controlled in neighboring municipalities. In turn, we did not find evidence that municipalities with tougher social distancing performed worse economically. Our results also highlight that estimates that do not account for endogeneity may largely underestimate the benefits of social distancing on reducing the spread of COVID-19.

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  • Alexandre Gori Maia & Leticia Marteleto & Cristina Guimarães Rodrigues & Luiz Gustavo Sereno, 2021. "The short-term impacts of coronavirus quarantine in São Paulo: The health-economy trade-offs," PLOS ONE, Public Library of Science, vol. 16(2), pages 1-18, February.
    • Handle: RePEc:plo:pone00:0245011
    DOI: 10.1371/journal.pone.0245011
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    References listed on IDEAS

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    1. Daron Acemoglu & Victor Chernozhukov & Iván Werning & Michael D. Whinston, 2021. "Optimal Targeted Lockdowns in a Multigroup SIR Model," American Economic Review: Insights, American Economic Association, vol. 3(4), pages 487-502, December.
    2. Shabnam Iezadi & Saber Azami-Aghdash & Akbar Ghiasi & Aziz Rezapour & Hamid Pourasghari & Fariba Pashazadeh & Kamal Gholipour, 2020. "Effectiveness of the non-pharmaceutical public health interventions against COVID-19; a protocol of a systematic review and realist review," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-16, September.
    3. Robert S. Pindyck, 2020. "COVID-19 and the Welfare Effects of Reducing Contagion," NBER Working Papers 27121, National Bureau of Economic Research, Inc.
    4. Farboodi, Maryam & Jarosch, Gregor & Shimer, Robert, 2021. "Internal and external effects of social distancing in a pandemic," Journal of Economic Theory, Elsevier, vol. 196(C).
    5. Michael Greenstone & Vishan Nigam, 2020. "Does Social Distancing Matter?," Working Papers 2020-26, Becker Friedman Institute for Research In Economics.
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    Cited by:

    1. Wang, Yupeng & Shimokawa, Satoru, 2024. "A trade-off between lives and the economy? Subsidizing dining out under the COVID-19 pandemic in Japan," Food Policy, Elsevier, vol. 124(C).
    2. Alexandre Gori Maia & Jose Daniel Morales Martinez & Leticia Junqueira Marteleto & Cristina Guimaraes Rodrigues & Luiz Gustavo Sereno, 2023. "Can the Content of Social Networks Explain Epidemic Outbreaks?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(1), pages 1-34, February.

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