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Economic impact of targeted government responses to COVID-19: Evidence from the large-scale clusters in Seoul

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  • Shin, Jinwook
  • Kim, Seonghoon
  • Koh, Kanghyock

Abstract

We estimate the economic impact of South Korea's targeted responses to the large-scale COVID-19 clusters in a highly concentrated business area (Guro) and a highly concentrated entertainment area (Itaewon) in Seoul, respectively. We find that foot traffic and retail sales decreased only within a 300 m radius and recovered to their pre-outbreak level after four weeks in the case of the Guro cluster. The reductions appear to be driven by temporary business closures rather than by citizens' risk avoidance behavior. However, the adverse economic impacts measured by foot traffic and retail sales of another outbreak of the COVID-19 cluster in Itaewon were persistent. Our results imply that the effects of less intense but more targeted COVID-19 interventions, such as pinpointed, temporary closures of businesses, can differ by underlying geographical characteristics.

Suggested Citation

  • Shin, Jinwook & Kim, Seonghoon & Koh, Kanghyock, 2021. "Economic impact of targeted government responses to COVID-19: Evidence from the large-scale clusters in Seoul," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 199-221.
    • Handle: RePEc:eee:jeborg:v:192:y:2021:i:c:p:199-221
    DOI: 10.1016/j.jebo.2021.10.013
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    Cited by:

    1. Kim, Seonghoon & Koh, Kanghyock & Lyou, Wonjun, 2023. "Spend as you were told: Evidence from labeled COVID-19 stimulus payments in South Korea," Journal of Public Economics, Elsevier, vol. 221(C).
    2. Chungeun Yoon, 2025. "Everyone knows what you did: evidence from public disclosure of travel logs," Empirical Economics, Springer, vol. 69(6), pages 3403-3436, December.
    3. Bonaccorsi, Giovanni & Scotti, Francesco & Pierri, Francesco & Flori, Andrea & Pammolli, Fabio, 2024. "Targeted policies and household consumption dynamics: Evidence from high-frequency transaction data," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 111-134.
    4. Jung, Haeil & Kim, Jun Hyung & Hong, Gihyeon, 2023. "Impacts of the COVID-19 crisis on single-person households in South Korea," Journal of Asian Economics, Elsevier, vol. 84(C).
    5. Aditya Kulkarni & Minkyong Kim & Jayanta Bhattacharya & Joydeep Bhattacharya, 2023. "Businesses in high-income zip codes often saw sharper visit reductions during the COVID-19 pandemic," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    6. Huiwen Gong & Robert Hassink & Cassandra C Wang, 2022. "Strategic coupling and institutional innovation in times of upheavals: the industrial chain chief model in Zhejiang, China [Institutional change in economic geography]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 279-303.
    7. Chun, Hyunbae & Kwon, Eunjee & Yang, Dongyun, 2024. "The rise of e-commerce and generational consumption inequality: Evidence from COVID-19 in South Korea," Regional Science and Urban Economics, Elsevier, vol. 104(C).

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    Keywords

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    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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