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Subsidizing the spread of COVID19 : Evidence from the UK’s Eat-Out to-Help-Out scheme

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  • Fetzer, Thiemo

    (University of Warwick)

Abstract

This paper documents that a large-scale government subsidy aimed at encouraging people to eat out in restaurants in the wake of the first 2020 COVID19 wave in the United Kingdom has had a large causal impact in accelerating the subsequent second COVID19 wave. The scheme subsidized 50% off the cost of food and non-alcoholic drinks for an unlimited number of visits in participating restaurants on Mondays-Wednesdays from August 3 to August 31, 2020. Areas with higher take-up saw both, a notable increase in new COVID19 infection clusters within a week of the scheme starting, and again, a deceleration in infections within two weeks of the program ending. Areas that exhibit notable rainfall during the prime lunch and dinner hours on days the scheme was active record lower infection incidence – a pattern that is also measurable in mobility data – and non-detectable on days during which the discount was not available or for rainfall outside the core lunch and dinner hours. A back of the envelope calculation suggests that the program is accountable for between 8 to 17 percent of all new local infection clusters during that time period.

Suggested Citation

  • Fetzer, Thiemo, 2020. "Subsidizing the spread of COVID19 : Evidence from the UK’s Eat-Out to-Help-Out scheme," The Warwick Economics Research Paper Series (TWERPS) 1310, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:1310
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    Cited by:

    1. Fetzer, Thiemo & Graeber, Thomas, 2020. "Does Contact Tracing Work? Quasi-Experimental Evidence from an Excel Error in England," CAGE Online Working Paper Series 521, Competitive Advantage in the Global Economy (CAGE).
    2. Islam, Marco, 2021. "Motivated Risk Assessments," Working Papers 2021:12, Lund University, Department of Economics, revised 26 Jul 2022.
    3. Deiana, Claudio & Geraci, Andrea & Mazzarella, Gianluca & Sabatini, Fabio, 2022. "Can relief measures nudge compliance in a public health crisis? Evidence from a kinked fiscal policy rule," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 407-428.
    4. Fetzer, Thiemo & Graeber, Thomas, 2020. "Does Contact Tracing Work? Quasi-Experimental Evidence from an Excel Error in England," The Warwick Economics Research Paper Series (TWERPS) 1314, University of Warwick, Department of Economics.
    5. Nicolás González-Pampillón & Gonzalo Nunez-Chaim & Katharina Ziegler, 2021. "Recovering from the first Covid-19 lockdown: Economic impacts of the UK's Eat Out to Help Out scheme," CEP Covid-19 Analyses cepcovid-19-018, Centre for Economic Performance, LSE.
    6. Deiana, Claudio & Geraci, Andrea & Mazzarella, Gianluca & Sabatini, Fabio, 2021. "COVID-19 Relief Programs and Compliance with Confinement Measures," IZA Discussion Papers 14064, Institute of Labor Economics (IZA).
    7. Morrissey, Karyn & Spooner, Fiona & Salter, James & Shaddick, Gavin, 2021. "Area level deprivation and monthly COVID-19 cases: The impact of government policy in England," Social Science & Medicine, Elsevier, vol. 289(C).

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    Keywords

    health ; externalities ; coronavirus ; subsidies ; consumer spending;
    All these keywords.

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