In light of Covid-19, an MIT study looks at tradeoffs between economic value and public health, across different types of retail:”A new study by MIT researchers uses a variety of data on consumer and business activity to tackle that question, measuring 26 types of businesses by both their usefulness and risk. Vital forms of commerce that are relatively uncrowded fare the best in the study; less significant types of businesses that generate crowds perform worse. The results can help inform the policy decisions of government officials during the ongoing pandemic. As it happens, banks perform the best in the study, being economically significant and relatively uncrowded. “Banks have an outsize economic impact and tend to be bigger spaces that people visit only once in a while,” says Seth G. Benzell, a postdoc at the MIT Initiative on the Digital Economy (IDE) and co-author of a paper published Wednesday that outlines the study. Indeed, in the study, banks rank first in economic importance, out of the 26 business types, but just 14th in risk. By contrast, other business types create much more crowding while having far less economic importance. These include liquor and tobacco stores; sporting goods stores; cafes, juice bars, and dessert parlors; and gyms. All of those are in the bottom half of the study’s rankings of economic importance. At the same time, cafes, juice bars, and dessert parlors, taken together, rank third-highest out of the 26 business types in risk, while gyms are the fifth-riskiest according to the study’s metrics — which include cellphone location data revealing how crowded U.S. businesses get. “Policymakers have not been making clear explanations about how they are coming to their decisions,” says Avinash Collis PhD ’20, an MIT-trained economist and co-author of the new paper. “That’s why we wanted to provide a more data-driven policy guide.” And if the Covid-19 pandemic worsens again, the research can apply to shuttering businesses again. “This is not only about which locations should reopen first,” says Christos Nicolaides PhD ’14, a digital fellow at IDE and study co-author. “You can also look at it from the perspective of which locations should close first, in another future wave of Covid-19.”
- The paper, “Rationing Social Contact During the COVID-19 Pandemic: Transmission Risk and Social Benefits of U.S. Location,” appears in Proceedings of the National Academy of Science, with Benzell, Collis, and Nicolaides as the authors. Benzell is about to start a new position as an assistant professor at Chapman University; in July, Collis will become an assistant professor at the University of Texas at Austin; Nicolaides is also a faculty member at the University of Cyprus.