WP: The Impact of Stay-at-Home Orders on US Output: A Network Perspective
Published in SSRN, 2020
Under the stay-at-home orders issued by states, economic activities are reduced or put on hold by some states across the U.S. to control the spread of COVID-19. By combining several sources of data, we estimate the output loss due to such restrictions using a network approach. Based on our most conservative estimates, the measures as of April 15, 2020 reduce 26% of total US output per period, and about 43% of which is due to the input-output connections in the production network. Using a SIR model with an inter-state infection network, we also calculate the cost of reducing each infection to be approximately 150,000 dollars during the period of March 19 to April 15, 2020. Simulation results of various hypothetical stay-at-home orders show that the unit cost of infection reduction of the existing order is about 13% higher than the local minimum.