Is no news bad news? The impact of disclosing COVID-19 tracing information on consumer dine out decisions.

ABSTRACT

Food markets around the world have been disrupted by the COVID-19 pandemic via consumer behavior upended by fear of infection. In this article, we examine the impact of disclosing COVID-19 contact tracing information on food markets, using the restaurant industry in China as a case study. By analyzing transaction data at 87 restaurants across 10 cities, we estimate difference-in-difference (DID) models to ascertain the impact of COVID-19 infections and contact information tracing on economic activity as measured by a daily number of transactions. Empirical results show that while the overall number of new COVID-19 infections at the national level caused a dramatic drop in numbers of transactions in all restaurants, restaurants in cities that disclosed contact tracing information of COVID-19 infections experienced a 23%-35% higher number of transactions than the ones in cities that did not disclose such information during the recovery period. Ultimately, we show that in the absence of a shelter-in-place mandate, disclosing contract tracing information to mitigate consumers' uncertainties about risks of being infected can contribute to a faster recovery of food markets, in addition to reducing COVID-19 infections.