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Faculty of Economics

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Johnsson, I., Pesaran, M. H., Yang, C. F.

Structural Econometric Estimation of the Basic Reproduction Number for Covid-19 Across U.S. States and Selected Countries


Abstract: This paper proposes a structural econometric approach to estimating the basic reproduction number (R0) of Covid-19. This approach identifies R0 in a panel regression model by filtering out the effects of mitigating factors on disease diffusion and is easy to implement. We apply the method to data from 48 contiguous U.S. states and a diverse set of countries. Our results reveal a notable concentration of R0 estimates with an average value of 4.5. Through a counterfactual analysis, we highlight a significant underestimation of the R0 when mitigating factors are not appropriately accounted for.

Keywords: basic reproduction number, Covid-19, panel threshold regression model

JEL Codes: C13 C33 I12 I18 J18

Author links: M. Hashem Pesaran