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How Hamilton Created U.S. Economic Independence
July 5, 2020
Where Less Internet Access Creates a Bigger “Homework Gap”
July 8, 2020
Why did the spring peeper (shown above) cross the road? Now we know.
In Maine, at the start of spring, hundreds of thousands of salamanders and frogs leave their winter hiding places. Walking (and hopping) through ditches, backyards, and roads, they head toward newly formed vernal pools. Some are killed by cars. Those that survive can breed and then leave.
According to the Unity College Herpetology Club–a group that escorts those little critters during their journey–many more were surviving the trip this year. Because of the lockdown, there were fewer cars.
Somewhat similarly, lockdowns could be helping our economy rather than harming it.
The Lockdowns’ Economic Impact
In a recent paper, two University of Chicago economists gathered cellphone data on consumer activity at 2.25 million businesses to assess the lockdowns’ economic impact. Their goal was to determine if the lockdown or human fear caused the massive decline in store traffic. They knew there was a collapse in commerce. The question was why.
The answer was fear of infection.
They got their answers by comparing foot traffic in places with and without lockdown mandates. One clue was the timing of the decline. It began before the legal mandates to shelter-in-place were declared. Then, after lockdowns began, although foot traffic plunged by 60 percent, legal restrictions explained only 7 percent of the decline. Instead, shoppers were voluntarily avoiding stores–especially in areas with more Covid-19 deaths.
Looking more closely at retail establishments, researchers observed a varied impact. Whereas restaurants saw a 99 percent decline, business was actually up at Outdoor Power Equipment Stores. Demonstrating reallocation, we abandoned our non-essential pleasures and focused on the essentials. We also demonstrated a preference for smaller, less busy stores–perhaps because they seemed safer.
Our Bottom Line: Tradeoff or Positive Externality?
Because coronavirus concerns rather than regulatory restrictions constrained consumers, the authors concluded that the lockdown was a solution rather than a problem. Instead of a health or wealth tradeoff, we wind up with a positive externality–a beneficial ripple that travels through the population. As one of the study’s authors explained. “Anything that slows the rate of the virus is the best thing you can do for the economy, even if by conventional measures it’s bad for the economy.”
Rather than a health or wealth tradeoff, a lockdown is an economic plus for us.. and for spring peepers.
So why could the frog cross the road? Because of the lockdown.
My sources and more: Dry, long, and excellent, this NBER paper presents the impact of the coronavirus lockdowns. Quite different, the fascinating story of Maine’s springtime amphibian migration was in the Bangor Daily News and The Atlantic.
