SOUTHERN ECONOMIC JOURNAL

The Effect of E-Cigarette Indoor Vaping Restrictions on Infant Mortality
Cooper M and Pesko MF
We estimate the effect of county-level e-cigarette indoor vaping restrictions (IVRs) on infant mortality using United States birth certificates from 2010 to 2015. We estimate difference-in-differences models and find that e-cigarette indoor vaping restrictions increased infant mortality by 0.39 infants per 1,000 live births (12.9%). These effects were disproportionately higher for infants born to younger mothers and in locations with higher baseline levels of prenatal smoking. Infant mortality increased by 34.1% between 100 days to 1 year after IVRs. Infant mortality due to infections and neoplasms were particularly elevated.
Impacts of Publicly Funded Health Insurance for Adults on Children's Academic Achievement
Bullinger LR, Gopalan M and Lombardi CM
Empirical evidence demonstrates that publicly funded adult health insurance through the Affordable Care Act (ACA) has had positive effects on low-income adults. We examine whether the ACA's Medicaid expansions influenced child development and family functioning in low-income households. We use a difference-in-differences framework exploiting cross-state policy variation and focusing on children in low-income families from a nationally representative, longitudinal sample followed from kindergarten to fifth grade. The ACA Medicaid expansions improved children's reading test scores by approximately 2 percent (0.04 SD). Potential mechanisms for these effects within families are more time spent reading at home, less parental help with homework, and eating dinner together. We find no effects on children's math test scores or socioemotional skills.
Impacts of state COVID-19 reopening policy on human mobility and mixing behavior
Nguyen TD, Gupta S, Andersen MS, Bento AI, Simon KI and Wing C
This study quantifies the effect of the 2020 state COVID economic activity reopening policies on daily mobility and mixing behavior, adding to the economic literature on individual responses to public health policy that addresses public contagion risks. We harness cellular device signal data and the timing of reopening plans to provide an assessment of the extent to which human mobility and physical proximity in the United States respond to the reversal of state closure policies. We observe substantial increases in mixing activities, 13.56% at 4 days and 48.65% at 4 weeks, following reopening events. Echoing a theme from the literature on the 2020 closures, mobility outside the home increased on average prior to these state actions. Furthermore, the largest increases in mobility occurred in states that were early adopters of closure measures and hard-hit by the pandemic, suggesting that psychological fatigue is an important barrier to implementation of closure policies extending for prolonged periods of time.
Stay-at-home orders were issued earlier in economically unfree states
McCannon BC and Hall JC
Stay-at-home orders curtailed the individual liberty of those across the United States. Governors of some states moved swiftly to impose the lockdowns. Others delayed and a few even refused to implement these policies. We explore common narratives of what determines the speed of implementation, namely partisanship and virus exposure. While correlation exists, we show that the most consistent explanation for the speed of the implementation of these orders is the state's economic freedom. It was the economically unfree states that issued stay-at-home orders earlier.
Economic lessons for COVID-19 pandemic policies
Viscusi WK
The COVID-19 pandemic poses novel health issues. However, the benefits and costs of the pandemic and policies to address it have a familiar economic structure. Chief among the health-related benefits are the monetized values of the U.S. mortality costs of $3.9 trillion in 2020. The combined U.S. mortality and morbidity costs are $5.5-5.9 trillion. Global mortality costs in 2020 total $10.1 trillion. The skewed age distribution of COVID-19 illnesses has stimulated increased advocacy of downward adjustments in the value of a statistical life (VSL) for older people. This article examines the role of age for policy analysis generally and for the rationing of scarce medical treatments, such as ventilators. Mortality risk reduction benefits should be based on the reduced probability of death multiplied by the pertinent VSL. Effective communication of risks to foster precautions hinges on the credibility of the information source, which public officials have jeopardized. Efficient control of risks imposes limits on personal freedoms to foster health improvements.
Economic freedom, pandemics, and robust political economy
Candela RA and Geloso V
What is the relationship, if any, between economic freedom and pandemics? This paper addresses this question from a robust political economy approach. As is the case with recovery from natural disasters or warfare, a society that is relatively free economically offers economic actors greater flexibility to adapt to pandemics. We argue that societies that are more economically free will be more robust to the impact from pandemics, illustrated by shorter time for economic recovery. We illustrate this relationship by testing how initial levels of economic freedom (at the start of the major influenza pandemics of the 20th century) temper contractions and accelerate recoveries for 20 OECD countries.
Essential or not? Knowledge problems and COVID-19 stay-at-home orders
Storr VH, Haeffele S, Lofthouse JK and Grube LE
In response to the COVID-19 pandemic, governments around the world issued stay-at-home orders, which required that individuals stay at home unless they were engaging in certain activities. Often these orders would designate certain goods and services as "essential" and would permit individuals engaged in the production, delivery, and purchase of those goods and services to leave their homes to do so. Implicit in these policies, of course, is the assumption that policymakers can know which goods and services are essential. As proved true while these stay-at-home orders were in effect, essentialness is necessarily subjective and depends on knowledge that is often dispersed, inarticulate, and changes over time. Policymakers, however, do not and often cannot have access to the local knowledge needed to determine which goods and services are essential, and they lack the feedback mechanisms they would need to adroitly adapt when circumstances change. This paper examines these knowledge problems associated with designating certain goods and services as "essential" when crafting and implementing stay-at-home orders.
The political economy of drug and alcohol regulation during the COVID-19 pandemic
Redford A and Dills AK
States tightly regulate access to alcohol and other substances. During the pandemic and related state of emergency, state and federal governments adopted a variety of regulations affecting this access. State shelter-in-place orders included decisions about whether liquor stores and marijuana dispensaries are essential businesses. Decisions about telehealth access to medical marijuana or treatments for substance use disorders were made at the state and federal levels. This article examines the political economy behind these decisions, focusing on deviations from the norm including Pennsylvania's decision to close state-run liquor stores. Interest groups and other political considerations help explain state and federal policy changes affecting access to alcohol and other substances.
The political economy of state responses to infectious disease
Coyne CJ, Duncan TK and Hall AR
How can public policy best deal with infectious disease? In answering this question, scholarship on the optimal control of infectious disease adopts the model of a benevolent social planner who maximizes social welfare. This approach, which treats the social health planner as a unitary "public health brain" standing outside of society, removes the policymaking process from economic analysis. This paper opens the black box of the social health planner by extending the tools of economics to the policymaking process itself. We explore the nature of the economic problem facing policymakers and the epistemic constraints they face in trying to solve that problem. Additionally, we analyze the incentives facing policymakers in their efforts to address infectious diseases and consider how they affect the design and implementation of public health policy. Finally, we consider how unanticipated system effects emerge due to interventions in complex systems, and how these effects can undermine well-intentioned efforts to improve human welfare. We illustrate the various dynamics of the political economy of state responses to infectious disease by drawing on a range of examples from the COVID-19 pandemic.
Separation of power and expertise: Evidence of the tyranny of experts in Sweden's COVID-19 responses
Bylund PL and Packard MD
Whereas most countries in the COVID-19 pandemic imposed shutdowns and curfews to mitigate the contagion, Sweden uniquely pursued a more voluntarist approach. In this article, our interest is primarily on how and why Sweden's approach to the pandemic was so unique. There are two parts to this research question: (1) why did virtually all other nations follow a radical lockdown protocol despite limited evidence to its effectiveness and (2) why did Sweden not follow this same protocol despite strong political pressures? The answers to these questions lie within typical government technocracy versus Sweden's constitutional separation of government and technocracy. We review the history of the responses to the pandemic and show how the "tyranny of experts" was severe within the typical technocratic policy response, and attenuated in Sweden's. Thus, the recent pandemic offers empirical evidence and insights regarding the role of Hayekian knowledge problems in engendering a technocratic "tyranny of experts" and how such effects can be structurally mitigated.
The political economy of the COVID-19 pandemic
Boettke P and Powell B
We argue that the policy response to the COVID-19 pandemic by all levels of government around the world is not consistent with recommendations from standard welfare economics. Thus, it is important to ask why such policies have been adopted. That opens the door to examining the political economy of the COVID-19 pandemic. This requires examining the incentives and information that confront policymakers and voters and the institutional environments that shape their incentives and information. This lead article frames questions addressed in the remainder of the symposium.
The Federal Reserve's response to the COVID-19 contraction: An initial appraisal
Cachanosky N, Cutsinger BP, Hogan TL, Luther WJ and Salter AW
We provide an initial assessment of the Federal Reserve's policy response to the COVID-19 contraction. We briefly review the historical episode and consider the standard textbook treatment of a pandemic on the macroeconomy. We summarize and then evaluate the Fed's monetary and emergency lending policies through the end of 2020. We credit the Fed with promoting monetary stability while maintaining that it could have done more. We argue that the Fed could have achieved stability without employing its emergency lending facilities. Although some facilities likely helped to promote general liquidity, others were primarily intended to allocate credit, which blurs the line between monetary and fiscal policy. These credit allocation facilities were unwarranted and unwise.
Battling COVID-19 with dysfunctional federalism: Lessons from India
Choutagunta A, Manish GP and Rajagopalan S
The Indian federation is highly centripetal, and historically, this has left states without the requisite legislative and fiscal authority to take independent action and initiate policies of significance. Consequently, India's response to the global COVID-19 pandemic was to impose a very severe countrywide lockdown using the mandate of the Union (federal) government. This centralized one-size-fits-all diktat was imposed despite high variations across states in resources, healthcare capacity, and incidence of COVID-19 cases. We argue that India's dysfunctional federalism is the reason for the centralized lockdown, preventing state and local governments from tailoring a policy response to suit local needs. Using mobility data, we demonstrate the high variation in curtailing mobility in different states through the centralized lockdown. We find that India's centralized lockdown was at best a partial success in a handful of states, while imposing enormous economic costs even in areas where few were affected by the pandemic.
The FDA and the COVID-19: A political economy perspective
March RJ
This article utilizes a political economy framework to examine how FDA regulations impacted the U.S. healthcare sector's ability to address COVID-19. I specifically examine the developing COVID-19 testing, the approval of the medication remdesivir, and COVID-19 vaccines. By examining periods before and after the FDA issued Emergency Use Authorizations (EUAs), my analysis finds that the FDA's regulations enacted before the COVID-19 pandemic began strongly restricted clinician and patient access to COVID-19 testing, remdesivir treatment, and approving vaccines. After the FDA issued EUAs, the healthcare sector quickly adopted COVID-19 testing and remdesivir with little evidence of negative consequences. These findings contribute to the economics literature examining the FDA and contemporary COVID-19 policy research.
Externality and COVID-19
Leeson PT and Rouanet L
Negative infectious disease externalities are less prevalent in the absence of government intervention and less costly to society than is often supposed. That is so for three reasons. (1) Unlike externality-creating behaviors in many classical externality contexts, such behaviors are often self-limiting in the context of infectious disease. (2) In market economies, behaviors that may create infectious disease externalities typically occur at sites that are owned privately and visited voluntarily. Owners have powerful incentives to regulate such behaviors at their sites, and visitors face residual infection risk contractually. (3) The social cost of infectious disease externalities is limited by the cheapest method of avoiding externalized infection risk. That cost is modest compared to the one usually imagined: the value of life (or health) lost to the disease if government does not intervene. We elaborate these arguments in the context of the COVID-19 pandemic.
The contagion externality of a superspreading event: The Sturgis Motorcycle Rally and COVID-19
Dave D, McNichols D and Sabia JJ
Large in-person gatherings of travelers who do not socially distance are classified as the "highest risk" for COVID-19 spread by the Centers for Disease Control and Prevention (CDC). From August 7-16, 2020, nearly 500,000 motorcycle enthusiasts converged on Sturgis, South Dakota for its annual rally in an environment without mask-wearing requirements or other mitigating policies. This study is the first to explore this event's public health impacts. First, using anonymized cell phone data, we document that foot traffic at restaurants/bars, retail establishments, and entertainment venues rose substantially at event locations. Stay-at-home behavior among local residents fell. Second, using a synthetic control approach, we find that the COVID-19 case rate increased substantially in Meade County and in the state of South Dakota in the month following the Rally. Finally, using a difference-in-differences model to assess nationwide spread, we find that following the Sturgis event, counties outside of South Dakota that contributed the highest inflows of rally attendees experienced a 6.4-12.5% increase in COVID-19 cases relative to counties without inflows. Our findings highlight that local policy decisions assessing the tradeoff between local economic benefits and COVID-19 health costs will not be socially optimal in the presence of large contagion externalities.
Educational Gender Gaps
Lundberg S
Cross-country studies reveal two consistent gender gaps in education-underachievement in school by boys and low rates of participation in STEM studies by girls. Recent economics research has shown the importance of social influences on women's STEM avoidance, but male low achievement has been less-studied and tends to be attributed to behavior problems and deficient non-cognitive skills. I revisit the determinants of the gender gap in U.S. educational attainment with a relatively-advantaged sample of young men and women and find that school behavior and measured skills are not very important drivers of gender differences, particularly in the transition to college. Educational aspirations, on the other hand, are strongly predictive of educational gaps and the gender difference in aspirations cannot be explained, even with rich adolescent data that includes parental expectations and school achievement indicators. These results suggest that gender identity concerns may influence (and damage) the educational prospects of boys as well as girls through norms of masculinity that discourage academic achievement.
Deterring Rearrests for Drinking and Driving
Sloan F, Eldred L, McCutchan S and Platt A
This study assesses why some individuals are re-arrested for driving while intoxicated (DWI). Using longitudinal data from North Carolina containing information on arrests and arrest outcomes, we test hypotheses that individuals prosecuted and convicted of DWI are less likely to be re-arrested for DWI. We allow for possible endogeneity of prosecution and conviction outcomes by using instrumental variables for the prosecutor's prosecution rate and the judge's conviction rate. With a three-year follow-up, the probability of DWI re-arrest was reduced by 6.6 percent if the person was prosecuted for DWI and, for those prosecuted, by 24.5 percent if convicted on this charge. Prosecution and conviction for DWI deters re-arrest for DWI.
Rasch Analyses of Very Low Food Security among Households and Children in the Three City Study
Moffitt RA and Ribar DC
The longitudinal Three City Study of low-income families with children measures food hardships using fewer questions and some different questions from the standard U.S. instrument for measuring food security, the Household Food Security Survey Module (HFSSM) in the Current Population Survey (CPS). We utilize a Rasch measurement model to identify thresholds of very low food security among households and very low food security among children in the Three City Study that are comparable to thresholds from the HFSSM. We also use the Three City Study to empirically investigate the determinants of food insecurity and of these specific food insecurity outcomes, estimating a multivariate behavioral Rasch model that is adapted to address longitudinal data. The estimation results indicate that participation in the Supplemental Nutrition Assistance Program and the Temporary Assistance for Needy Families program reduce food insecurity, while poverty and disability among caregivers increase it. Besides its longitudinal structure, the Three City Study measures many more characteristics about households than the CPS. Our estimates reveal that financial assistance through social networks and a household's own financial assets reduce food insecurity, while its outstanding loans increase insecurity.
High School Dropouts and Sexually Transmitted Infections
Anderson DM and Pörtner CC
People who drop out of high school fare worse in many aspects of life. We analyze the relationship between dropping out of high school and the probability of contracting a sexually transmitted infection (STI). Previous studies on the relationship between dropout status and sexual outcomes have not empirically addressed unobserved heterogeneity at the individual level. Using fixed effects estimators, we find evidence supporting a positive relationship between dropping out of high school and the risk of contracting an STI for females. Furthermore, we present evidence that illustrates differences between the romantic partners of dropouts versus enrolled students. These differences suggest that female dropouts may be more susceptible to contracting STIs because they partner with significantly different types of people than non-dropouts. Our results point to a previously undocumented benefit of encouraging those at risk of dropping out to stay in school longer.
Children as income-producing assets: the case of teen illegitimacy and government transfers
Clarke GR and Strauss RP
This paper develops a classical model of the teen fertility decision in the presence of public income transfers. The theoretical model predicts that welfare payments will encourage fertility, holding constant other economic opportunities, and that better economic opportunities will discourage fertility. Considering the possible simultaneity of illegitimacy rates and benefit levels, due to the collective choice process, the authors confirm the theoretical model's predictions with state-level data from 1980 through 1990. The authors find that including fixed effects in the regression to control for unobserved differences between states does not sufficiently control for endogeneity. After controlling for endogeneity, real welfare benefits are strongly and robustly related to teen illegitimacy. The point estimates of the elasticity with respect to changes in the illegitimacy rate are around +1.3 for White teens and +2.1 for Black teens. Real wages for women with a high school education or less are negatively related to teen illegitimacy for White teens, with an elasticity of around -0.4. Finally, male wages appear to have little effect on the illegitimacy rate for White teens but appear negatively correlated with the illegitimacy rate for Black teens in some model specifications.