News shocks at the local level: Evidence from a conditional Covid-19 containment measure.
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Authors
Publication Date
2022-03-07Journal Title
Economics letters
ISSN
0165-1765
Volume
214
Language
eng
Type
Other
This Version
VoR
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Savu, A. (2022). News shocks at the local level: Evidence from a conditional Covid-19 containment measure.. [Other]. https://doi.org/10.1016/j.econlet.2022.110416
Abstract
To reduce the spread of Covid-19 whilst limiting the economic costs of containment policies, governments have introduced geographically-flexible conditional restrictions - measures targeting sub-national areas whose severity depends on the virus's local incidence rate. I analyze whether conditional measures impact transmission rates via a <i>news-shock</i> effect - that is, by incentivizing indirect actions in anticipation of the policies being carried out. Exploiting a natural experiment from Romania in a regression-discontinuity framework, I provide early empirical evidence in this sense: I find that the Covid-19 incidence rate fell significantly in targeted constituencies following the announcement of a conditional containment measure, but <i>prior</i> to the policy being implemented. My results add to a broader literature on news-driven fluctuations, wherein expectations of future policies can impact immediate behaviors. I conclude by discussing an important avenue for future research.
Keywords
Public goods, Schooling, Regression Discontinuity, Covid-19, Local Restrictions, News Shocks
Identifiers
35283544, PMC8900875
External DOI: https://doi.org/10.1016/j.econlet.2022.110416
This record's DOI: https://doi.org/10.17863/CAM.83522
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