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Household Expenditures and the Effective Reproduction Number in Japan: Regression Analysis

Author

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  • Hajime Tomura

    (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda, Shinjyuku-ku, Tokyo, 169-8050, Japan.)

Abstract

Daily estimates of the effective reproduction number for new coronavirus based on reporting dates are regressed on real household expenditures per household on eating out, traveling, and apparel shopping, as well as mobility in public transportation, using publicly available daily nationwide data from February 15, 2020, to February 1, 2021 in Japan. The effects of absolute humidity, the declaration of states of emergency, and the year-end and new-year holiday period are controlled through dummy variables. The lagged infectious effect of economic activities due to incubation periods is also taken into account. Estimated regression coeffcients indicate that real household ex- penditures for cafe and bar had larger effects on the effective reproduction number per value of spending than the other types of household expenditures in explanatory vari- ables during the sample period. Thus, a loss of aggregate demand is minimized if the effective reproduction number is lowered by restricting only household consumption of cafe and bar. The posterior means of simulations based on the estimated regression coeffcients, however, imply that even if a self-restraint on packaged domestic travels and an endogenous decline in mobility are taken into account, it will be necessary to cut household consumption of cafe and bar by more than 80% of the 2019 level, in order to keep the e ective reproduction number below one on average.

Suggested Citation

  • Hajime Tomura, 2021. "Household Expenditures and the Effective Reproduction Number in Japan: Regression Analysis," Working Papers 2107-1, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:2107-1
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    References listed on IDEAS

    as
    1. FUJII Daisuke & NAKATA Taisuke, 2021. "Covid-19 and Output in Japan," Discussion papers 21004, Research Institute of Economy, Trade and Industry (RIETI).
    2. Daisuke Fujii & Taisuke Nakata, 2021. "COVID-19 and output in Japan," The Japanese Economic Review, Springer, vol. 72(4), pages 609-650, October.
    3. Yoshio Kajitani & Michinori Hatayama, 2021. "Explaining the effective reproduction number of COVID-19 through mobility and enterprise statistics: Evidence from the first wave in Japan," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-12, March.
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    Cited by:

    1. So Kubota, 2021. "The macroeconomics of COVID-19 exit strategy: the case of Japan," The Japanese Economic Review, Springer, vol. 72(4), pages 651-682, October.
    2. Mitsuhiro Fukao & Etsuro Shioji, 2022. "Is There a Trade‐Off between COVID‐19 Control and Economic Activity? Implications from the Phillips Curve Debate," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 66-85, January.

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    More about this item

    Keywords

    new coronavirus; effective reproduction number; consumption; mobility.;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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