Travel Reductions amid COVID-19: Implications for Welfare and Policy

Abstract

Using daily county-level travel data within the U.S., this paper investigates the welfare costs of travel reductions due to the coronavirus disease 2019 (COVID-19). Welfare of individuals (related to their travel) is measured by their inter-county and intra-county travel, where travel costs are measured by the corresponding distance measures. The empirical investigation provides evidence for a significant increase in the negative effects of distance on travel until April 2020, after which a recovery has started. The cumulative welfare costs of travel reductions with respect to January 20th, 2020 takes its highest value of about 11% on April 19th, 2020 for the U.S., with a range between 7% and 16% across the U.S. counties that can be explained by their initial travel patterns. Important transport policy implications follow.

Keywords: COVID-19, Coronavirus, Travel, Welfare, Distance

JEL Classification: J61, I10, I31, R11, R13