Economics may explain high number of new COVID-19 cases in some states
By Kent R. Kroeger (June 5, 2020)
Defending in April her decision not to issue a statewide, mandatory ‘stay-at-home’ order, Iowa Governor Kim Reynolds (R) said, “We have a role and obligation from our farmers, to our processors, to our supply chain to continue to feed the world and keep food on the plate.”
Iowa produces 10 percent of the nation’s food supply.
“Our goal, of course, is to get Texas back to work,” Texas Governor Greg Abbott (R) said in late April as his state slowly rolled back its ‘stay-at-home’ order.
And its not just states with Republican governors feeling the pressure to re-open their economies during the ongoing COVID-19 pandemic, California has witnessed some of the largest protests to get the state’s economy up and going.
Oceanside, California city councilman Christopher Rodriguez, a Republican, told a protest crowd gathered in mid-May that his mother had taught him, “If you don’t work, you don’t eat.”
Popular podcaster, Joe Rogan, has been one of the most vocal critics of the California statewide lockdown and — with his 4.6 million subscribers — is taken seriously among California politicians.
“How are you supposed to make money?” asked Rogan during a recent podcast, who chides those politicians who are asking people to “snitch” on businesses that open during the statewide lockdown but say little about staying healthy.
“This is bad government. There’s zero effort talking about giving people information on how to strengthen your immune system. Zero. Or talking to people about lowering stress. Zero on the importance of keeping your body healthy…It’s crazy.”
Facing pressure to re-open the state economy, California Governor Gavin Newsom, one of the first governors to issue lockdown orders, has also been among the most active governors in putting forth a plan to safely reopen the state economy.
“Many of the strengths of the California economy — its role as a hub for commerce, tourism and education in the Pacific Rim — have become liabilities during the pandemic-induced recession,” conclude Tim Arango and Thomas Fuller, who have covered the coronavirus pandemic in California for The New York Times.
It has been under these legitimate economic pressures that recent upticks in new COVID-19 cases in some states force an equally legitimate question: “Are some governors, particularly Republicans governors, opening up their economies too fast?”
Figure 1 shows the 20 U.S. states with highest number of new daily COVID-19 cases relative to their peak number (7-day moving averages are used to smooth out random day-to-day variations).
Figure 1: 20 U.S. States with highest number of new daily COVID-19 cases relative to their peak number
As of June 3rd, Arizona, Arkansas, North Carolina, Texas, Utah and California were at their peaks in daily new cases and, among the 10 states at (or near) their new cases peak, nine are led by Republican governors.
But notice also that nine of those states struggling with bringing their number of new cases down are also Atlantic or Gulf coastal states, and are among the states with the highest percentage of their GDP connected to trade with China.
Hold your comments for a moment. I am not suggesting China is somehow directly involved in keeping the number of new COVID-19 cases high in these states. But, it is possible the economic stresses of the coronavirus pandemic have been hardest on those states heavily dependent on trade with China. Subsequently, those states might be among the first to try and re-open their economies before it is prudent.
If we examine those 20 states that are at (or near) their minimum number of new daily COVID-19 cases relative to their peaks, an opposite pattern emerges for the partisanship of governors, the state’s connection with Chinese trade, and proximity to the Atlantic and Gulf coasts.
Figure 2: 20 U.S. States with lowest number of new daily COVID-19 cases relative to their peak number
Among the top 10 states in the relative number of new daily cases, only three are led by Republican governors (Idaho, Vermont, Wyoming), three are in the Top 15 for trade with China (Idaho, Louisiana, New Jersey) and only one is an Atlantic/Gulf coast state (Louisiana).
So, what is causing those states to have problems bringing down their number of new cases? Is it those Republican governors? All that beach and water that makes people want to leave their safe homes? Or is it the heavier economic burden some states are experiencing during this pandemic that is causing the premature relaxing of lockdown orders?
Of course, it could be all of the above. And we must also account for the fact that the pandemic started later in some states compared to others. Lastly, it may be the importance of international trade in general, not just trade with China, that compels some states to re-open too early.
A Quick and Dirty State-level Model
Figure 3 shows the parameter estimates and diagnostics for a linear model explaining the number of new daily COVID-19 cases relative to state-level peaks. [Keep in mind, these results represent the COVID-19 data through June 3rd. We have seen throughout this pandemic that new case levels can change rapidly from day-to-day — which will affect static model results like the one I’m reporting here.]
Here are the bottom line findings for the state-level COVID-19 data through June 3rd:
(1) The most important correlate with new COVID-19 cases is the percentage of a state’s GDP related to trade with China (standardized coefficient = 0.55, p = 0.002).
(2) There is a partisan effect: States with Republican governors are having greater difficulties bringing down the relative number of new COVID-19 cases (standardized coefficient = 0.30, p = 0.02).
(3) While not statistically significant from the common frequentist perspective (p > 0.05), there is an indication that Atlantic and Gulf coastal states are also experiencing higher relative numbers of new COVID-19 cases.
(4) Not significant in explaining the relative number of new cases are these variables: (a) Days since the first confirmed COVID-19 case, and (b) the relative importance of international trade on a state’s GDP.
Figure 2: A state-level linear model explaining the number of new daily COVID-19 cases (7-day moving average) relative to state-level peaks (7-day moving average).
Ideally, the above linear model would have accounted for the different speeds at which states are rolling back their lockdown orders. I suspect — rather, I’m fairly confident — the state-level policy differences are in fact what we are seeing with the significant parameters in the above model.
The premature loosening of lockdowns by Republican governors and the start of the vacation season (i.e., people love warm beaches) are probably playing a small but meaningful role in recent upticks in new COVID-19 cases.
However, the most important factor appears to be the extent to which a state relies on trade with China. And it is important to note that China’s economy is substantially open again. The pressure on U.S. governors to re-open their own state economies will only increase as China and other countries return their economies back to (near) normal.
Christopher Rodriguez’ mother: “If you don’t work, you don’t eat.”
Send comments to: email@example.com
Or tweet me at: @KRobertKroeger1