Estimated effects of economic policies for COVID-19 on the leisure and recreation industry under public health interventions

The appropriate policy responses for COVID-19 are being vigorously debated, especially regarding whether there is a trade-off between containing the spread of the virus and reducing the economic recession. The aim of the paper is to examine the effect of various economic policies on the leisure and recreation industry under public health interventions during the pandemic. We collect data for 131 countries/regions from February to October 2020 and employ fixed-effects models to examine the impact of economic policies after controlling for public health interventions and country- and time-fixed effects. Results show that, with an impact lag, economic policies significantly promote current-date leisure and recreation activities under public health intervention; this effect peaks after around one month, and the two policies mutually reinforce each other in the medium term. The positive effect of economic policies ranges from 5 to 11%, depending on the magnitude of public health interventions. With regard to the different categories of measures, monetary policies have an immediate positive announcement effect while fiscal policies significantly promote leisure and recreation activities, though with a response lag. In addition, this study discusses the implications for the recovery of the leisure and recreation industry under pandemic crisis from a policy perspective.