A trade-off between lives and the economy? Subsidizing dining out under the COVID-19 pandemic in Japan

Abstract

We investigate how a government subsidy for dining out to support the restaurant industry has been associated with economic and health outcomes during the COVID-19 pandemic in Japan. Using nationwide 500-meter mesh data, we demonstrate that Japan’s Go To Eat scheme, which was gradually introduced across all prefectures beginning in October 2020, mitigated the negative impact of the pandemic on population mobility in restaurant areas, while having little association with the spread of COVID-19 afterward. The influence was particularly large for population mobility within a prefecture and in restaurant areas near train stations. The scheme also had diminishing positive spillover effects around the restaurant areas. The findings imply that such a subsidy can be a balanced policy response to the pandemic once epidemiological factors are properly managed.