Saturday 31 October 2020

Eat Out to Help Spread?

Fetzer, an economist at Warwick University, has attempted to link the UK Treasury's 'Eat Out to Help Out' scheme in England and the spread of Covid-19 infections ( https://www.theguardian.com/business/2020/oct/30/treasury-rejects-theory-eat-out-to-help-out-caused-rise-in-covid). The scheme was an attempt to boost the hospitality sector and operated in August, from Monday to Wednesday, paying half the costs of meals and soft drinks. Fetzer noted that infections spread rapidly in areas with lots of participating restaurants but slowed there, after the scheme ended. He also looked at local rainfall patterns. When it rained heavily at lunch or dinner times on Monday to Wenesday, fewer people ate out and there was a lower infection rate. This pattern was not evident when it rained at these same times, on days of the week when the scheme was not operating. Fetzer's hypothesis (and it is a hypothesis rather than a theory) is, that although the scheme delivered a short-term boost, by accounting for up to 20% of the new clusters across the summer, it actually caused economic damage to the hospitality sector. The Treasury have 'angrily' rejected Fetzer's conclusions, noting that other countries have also seen an 'uptick' in infections. This is not, however, much of an argument, as these other countries (especially, if highly dependent on tourism) have also been trying to boost their hospitality sectors. I (like some quoted economists, who are more qualified in this area than I), believe that Fetzer's ideas deserve more detailed consideration. The usefulness of a scheme is surely not only judged on its having a feel good factor!

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