The economic impact of COVID-19-related restaurant and bar closures in April 2020, alone, is estimated as $52.4 million in lost gross regional product across Northwestern North Carolina.
The findings were released by economists at Appalachian State University's Center for Economic Research and Policy Analysis (CERPA) in a May 2020 report on the regional economic impacts of COVID-19. Specifically, the study examined how April restaurant closures during North Carolina's "Stay at Home" Order affected a five-county region in northwestern North Carolina. The region is defined as Ashe, Avery, Caldwell, Watauga and Wilkes Counties.
The report is available online at cerpa.appstate.edu/covid-19.
The researchers estimate that the restrictions resulted in a $52.4 million reduction in gross regional product (GRP) via direct (reduced employee spending), indirect (reduced business spending across the supply chain) and induced (reduced spending from employees and suppliers) effects.
"This translates into the annual equivalent of losing 675 full-time jobs (annual FTE) or a reduction in full-time equivalent employment of 8,112 (one-month FTE) during the month of April, and a corresponding foregone labor income of $17.2 million. The reduced economic activity also results in approximately $3.5 million in total foregone sales tax revenue, about $1.1 million of which is distributed to county and other local governments in the region. Foregone labor income reduces state income tax revenues by about $548,000."
According to CERPA Director, Dr. Ash Morgan, the report is a preliminary analysis.
"We anticipate conducting additional studies as more primary and secondary data become available," said Morgan. "We are currently investigating the economic impacts from disruptions to other sectors of the economy, as well as the net effects resulting from federal stimulus programs."
About the Center for Economics Research and Policy Analysis
The Center for Economics Research and Policy Analysis (CERPA) at Appalachian State University enables decision-makers to implement policies that better achieve targeted outcomes by producing research and disseminating information on current economic and policy issues. Housed in the Walker College of Business Department of Economics, CERPA maintains the Appalachian Experimental Economics Laboratory (AppEEL) as part of the experimental economics program and encourages faculty and student student research. For more information, visit cerpa.appstate.edu.