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We structurally estimate the parameters of a political economy of the determinants of voters’ support for opening up the economy and responsiveness by state and local authorities. We develop a model of the impact or lockdown decisions in the economy that combines heterogeneity in the local economic structure across districts or localities and the disease’s spread as following an SIR model. We intend to analyze whether the timing and extent of the government’s response corresponds with predictions derived from the tradeoff between public health and economic impact that would vary across districts or localities based on the structural parameters identified in the model. The empirical model is augmented by other political and institutional considerations, such as partisan alignment of the officeholders. We use survey data to model the demand side of policymaking across states, rather than relying purely on economic variables.
We connect our model with the last presidential election. We predict that in areas with a higher proportion of occupations that cannot be done from home, workers (mostly male) will be more willing to risk contagion to continue working and support the party that wants to keep the economy open.