The coronavirus (COVID-19) crisis has exposed vulnerabilities in global value chains. For example, the supply of vital goods and product components was disrupted in many countries. This has sparked a public debate – also in the Netherlands – about solutions to make international trade more...Read more
Containment measures reduce spread of COVID-19
As in many other countries, the Dutch government has introduced containment measures to reduce the spread of the COVID-19 virus. DNB research has demonstrated that these measures have been effective in reducing the number of COVID-19-related confirmed cases and deaths by limiting people’s mobility. This implies that the number of confirmed cases and deaths may rebound if the measures are eased early.
Containment measures in the Netherlands
Figure 1 shows the development of the number of confirmed COVID-19 cases in the Netherlands, together with the University of Oxford’s Stringency Index. The Stringency Index is a measure of the strictness of various containment measures, comprised in a number ranging from 1 to 100. In mid-March the Dutch government first introduced containment measures to counter the spread of the COVID-19 virus. These involved − among other things − closing schools, cancelling public events and encouraging social distancing. Given an incubation period of 2 to 14 days, if these measures were successful in combating the virus, around the end of March the growth of the number of confirmed cases should have declined.
Figure 1 - COVID-19-related confirmed cases and containment measures in the Netherlands
Source: Oxford COVID-19 Government Response Tracker
Figure 2 shows, on the basis of econometric estimations, the likelihood of a structural break in the trend growth rate of the number of confirmed cases for various dates. The figure shows that this break most likely occurred on 27 March and that from that moment the trend growth rate declined significantly. This implies that the containment measures in the Netherlands countered the spread of the virus effectively.
Figure 2 - Likelihood of a structural break in the trend growth rate of the number of confirmed cases in the Netherlands
Containment measures reduce mobility
Determining the direct effect of containment measures on the spread of the virus is complicated by the fact that people also take self-preservation measures themselves to avoid getting infected. For example, people choose to stay home more and pay more attention to personal hygiene. As an alternative, the indirect effect of containment measures can be estimated by examining people’s mobility. One measure of mobility is Google’s mobility index, which keeps track of the patterns of movement of people in relation to various locations and activities. An econometric analysis for 15 European countries (including the Netherlands) was performed on the basis of these data, which pertain to the period of 19 February to 9 June. The analysis results demonstrate that containment measures have a negative effect on mobility related to retail and recreation, domestic travel, and work. However, the measures did not affect the number of visits to pharmacies, supermarkets, and parks. A possible reason for this is that, regardless of the containment measures, medication and groceries must be purchased outside the home. In addition, restrictions to park visits were very strict in some countries (including Italy and France), but moderate in other countries (including the Netherlands). The results also demonstrate that international travel restrictions had no impact on average domestic mobility. Other measures, such as the closure of schools and places of employment, and limiting gatherings, did decrease mobility.
The virus spreads less rapidly if mobility is low
A second analysis of the same selection of countries reveals that a decrease in mobility leads to a decrease in both the number of COVID-19-related confirmed cases and deaths and the reproduction number. The reproduction number indicates how many people an infected person infects. This proves that containment measures counter the spread of the virus, as they reduce people’s mobility. These results are in line with the findings presented in Box 1 of our June 2020 edition of the Economic Developments and Outlook. Based on a theoretical model, we have demonstrated that containment measures reduce the spread of the COVID-19 virus and limit long-term economic costs. Both the empirical and the theoretical models suggest that the number of confirmed cases and deaths may rebound as measures are eased and mobility increases.