Do Stay-at-Home Orders Cause People to Stay at Home? Effects of Stay-at-Home Orders on Consumer Behavior

Alexander, Diane; Karger, Ezra

doi:10.21033/wp-2020-12

Working Paper Revision

Do Stay-at-Home Orders Cause People to Stay at Home? Effects of Stay-at-Home Orders on Consumer Behavior

Abstract: We link the county-level rollout of stay-at-home orders to anonymized cellphone records and consumer spending data. We document three patterns. First, stay-at-home orders caused people to stay at home: county-level measures of mobility declined by between 9% and 13% by the day after the stay-at-home order went into effect. Second, stay-at-home orders caused large reductions in spending in sectors associated with mobility: restaurants and retail stores. However, food delivery sharply increased after orders went into effect. Third, there is substantial county-level heterogeneity in consumer behavior in the days leading up to a stay-at-home order. While both people living in Democrat- and Republican-supporting counties responded similarly to the orders themselves, those in Democrat-supporting counties also reduced their movement and restaurant spending well before stay-at-home orders went into effect. This pattern was less clear in Republican-supporting counties. These differences are not explained by the fact that Democrat-supporting counties instituted stay-at-home orders earlier than Republican-supporting counties, on average.

Keywords: Covid-19; stay-at-home orders; consumer spending; high-frequency data;

JEL Classification: A19; E21; I12; R20; R50;

https://doi.org/10.21033/wp-2020-12