Latent social distancing: Identification, causes and consequences

It is not directly observable how effectively a society practices social distancing during the COVID-19 pandemic. This paper proposes a novel and robust methodology to identify latent social distancing at the country level. We extend the Susceptible-Exposed-Infectious-Recovered Deceased (SEIRD) model with a time-varying, country-specific distancing term, and derive the Model -Inferred DIStancing index (MIDIS) for 120 countries using readily available epidemiological data. The index is not sensitive to measurement errors in epidemiological data and to the values assigned to model parameters. The evolution of MIDIS shows that countries exhibit diverse patterns of distancing during the first wave of the COVID-19 pandemic-a persistent increase, a trendless fluctuation, and an inverted U are among these patterns. We then implement regression analyses using MIDIS and obtain the following results: First, MIDIS is strongly correlated with available mobility statistics, at least for high income countries. Second, MIDIS is also strongly associated with (i) the stringency of lockdown measures (governmental response), (ii) the cumulative number of deceased persons (behavioral response), and (iii) the time that passed since the first confirmed case (temporal response). Third, there is statistically significant regional variation in MIDIS, and more developed societies achieve higher distancing levels. Finally, MIDIS is used to explain output losses experienced during the pandemic, and it is shown that there is a robust positive relationship between the two, with sizable economic effects.