JUE insight: Learning epidemiology by doing: The empirical implications of a Spatial-SIR model with behavioral responses

Bisin, A.; Moro, A.

We simulate a spatial behavioral model of the diffusion of an infection to understand the role of geographic characteristics: the number and distribution of outbreaks, population size, density, and agents’ movements. We show that several invariance properties of the SIR model concerning these variables do not hold when agents interact with neighbors in a (two dimensional) geographical space. Indeed, the spatial model's local interactions generate matching frictions and local herd immunity effects, which play a fundamental role in the infection dynamics. We also show that geographical factors change how behavioral responses affect the epidemic. We derive relevant implications for estimating the effects of the epidemic and policy interventions that use panel data from several geographical units. © 2021 Elsevier Inc.