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© 2021 International Monetary Fund


IMF Working Paper

Statistics Department

Assessing the Impact of Business Closures on COVID-19 Outcomes

Prepared by Xuequan Elsie Peng and Chima Simpson-Bell*

Authorized for distribution by Carlos Sánchez-Muñoz

July 2022

IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

ABSTRACT: In this paper, we present a framework for assessing the effectiveness of different business closure policies, using New York City as a case study. Business closure policies have been widely implemented in an attempt to slow down the pandemic, but it is difficult to measure the contribution of closures of specific industries to virus transmission. Our framework allows us to estimate the impact of specific industry closures on the spread of COVID-19 via their effects on aggregate mobility. We find that early reopening led to a prolonged pandemic and a large case surge in the second wave during 2020, though the reopening allowed the city to regain its economic function as a consumption hub. An alternative policy that extends the lockdown is found to be more cost-effective as it makes future traveling safer and prevents the economy from relapsing into a more stringent policy regime.

RECOMMENDED CITATION: Peng, X. E. and Simpson-Bell, C., 2022, “Assessing the Impact of Business Closures on COVID-19 Outcomes”

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Title Page


Assessing the Impact of Business Closures on COVID-19 Outcomes

Prepared by Xuequan Elsie Peng and Chima Simpson-Bell


  • I. Introduction

  • II. Data and Stylized Facts

    • II.1 Data Sources and Key Variable Construction.

    • II.2 Stylized Facts

      • Fact 1: Business Closure Policies in NYC

      • Fact 2: Mobility Patterns Over Time

      • Fact 3: Mobility Patterns by Industry

  • III. Empirical Model

    • III.1 Demand for Consumption Trips

    • III.2 Mobility Impact on COVID-19.

  • IV. Estimation and Results

    • IV.1 Estimating Trip Preferences.

      • Endogeneity

    • IV.2 Calibrating Additional Mobility Parameters (εk,αk)

    • IV.3 Estimating the Impact of Mobility on COVID-19

      • Endogeneity

      • Estimation Results.

  • V. Assessing the Policy Impact

    • V.1 Current Policy

    • V.2 Alternative Policy

    • V.3 Discussion on spillover effects

  • VI. Conclusion

  • References

  • Tables

  • Annex I. Data Construction

  • Annex II. Additional Figures


  • 1. Policy Timeline in NYC.

  • 2. Capacity Constraint Across Different Industries.

  • 3. Change in Aggregate Mobility.

  • 4. Industry Contribution to Overall Change in Mobility with Gradual Reopening

  • 5. Impact of Gradual Reopening on COVID-19 Cases and Deaths

  • 6. Delayed Reopening Policy and Mobility

  • 7. Impact of Delayed Reopening on COVID-19 Cases and Deaths

  • 8. Neighborhood Heterogeneity

  • A2.1. Capacity Constraint for Other Industries

  • A2.2. Local Amenities and Population Density


  • 1. Travel Pattern by Industry

  • 2. Trip Preference by Industry

  • 3. Trip Preference by Industry with Worker Heterogeneity

  • 4. Expenditure Share

  • 5. Mobility and COVID-19 Cases

  • 6. Mobility and COVID-19 Deaths

  • 7. Policy Impact Summary


This paper has benefitted from comments from Serkan Arslanalp, Bas Bakker, Maria Borga, Michele Fornino, Carlos Sánchez-Muñoz and Alberto Sanchez Rodelgo. All remaining errors are the responsibility of the authors.

Assessing the Impact of Business Closures on COVID-19 Outcomes
Author: Xuequan Elsie Peng and Chima Simpson-Bell