The Impact of Social Distancing and Masking on COVID-19 Spread and Consumer Spending

We examine the impact of government interventions on the spread of COVID-19 and consumer spending. We do this by first estimating models of COVID-19 spread, consumer spending and social distancing. Social distancing has a large effect on reducing COVID-19 spread, while mask mandates are most effective when combined with social distancing. Non-mask government interventions also reduce COVID-19 spread. Social distancing is more responsive to national case numbers than local case numbers. Mask mandates tend to increase social distancing, as do shelter-in-place orders. However, other governmental restrictions do not change social distancing much. Social distancing hurts spending in the absence of a mask mandate, but has no effect on spending if there is a mask mandate. Mask mandates have a direct effect of reducing spending in counties with low levels of social distancing. Non-mask governmental interventions as a whole do not have a large effect on consumer spending. We use these three estimated models to calculate the effect of mask mandates and other governmental interventions on COVID-19 cases, deaths and consumer spending. Implemented mask mandates not only decreased COVID-19 cases by 1.2M, saving 45,000 lives, over a 4-month period, but added $99B of additional spending. The other governmental interventions that were implemented reduced the number of COVID-19 cases by nearly 15M, saving over 545,000 lives, while reducing consumer spending by nearly $170B over our 4-month period. Thus, these restrictions were cost effective as long as one values each saved life at $306,000 or more.