COVID-19 and restaurant demand: early effects of the pandemic and stay-at-home orders

By Yang Yang, Hongbo Liu, Xiang Chen. International Journal of Contemporary Hospitality Management, 2020

170 citations recorded by the source corpus.

Purpose This paper aims to evaluate the early effects of the pandemic of coronavirus disease 2019 (COVID-19) and accompanying stay-at-home orders on restaurant demand in US counties. Design/methodology/approach The following two sets of daily restaurant demand data were collected for each US county: foot traffic data and card transaction data. A two-way fixed-effects panel data model was used to estimate daily restaurant demand from February 1 to April 30, 2020. Findings Results show that a 1% increase in daily new COVID-19 cases led to a 0.0556% decrease in daily restaurant demand, while stay-at-home orders were collectively associated with a 3.25% drop in demand. The extent of these declines varied across counties; ethnicity, political ideology, eat-in habits and restaurant diversity were found to moderate the effects of the COVID-19 pandemic and stay-at-home orders. Practical implications These results characterize the regional restaurant industry’s resilience to COVID-19 and identify particularly vulnerable areas that may require pubic policies and managerial strategies for intervention. Originality/value This study represents a pioneering attempt to investigate the economic impact of COVID-19 on restaurant businesses.

Subfields: Economics and Econometrics, Marketing, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/0f224ea955ac72017703db082e9b6e037327c8b2