Impact of Varying Coronavirus Regulations on Green-industry Sales

Abstract

In 2020, the COVID-19 pandemic changed the way many businesses conducted business. Notably, regulations imposed by states impacted how green-industry firms sold their plants and landscape products. However, not all states implemented the same stringency of regulations. Using an online consumer survey implemented in Jan 2021, we examine the impact of varying regulation stringencies across five treatment groups (Michigan, and New York, and low, medium, and high stringency). We estimate the difference between 2020 and 2019 self-reported expenditures, in conjunction with propensity score matching to compare each treatment with the other treatments. Results indicate that, for the most part, states with greater stringency associated with their COVID regulations did not impact plant and landscape expenditures negatively between 2019 and 2020. However, Michigan consumers did spend significantly less than medium- and high-stringency states for landscape products. Michigan was one of only two states that put qualifications on green-industry firms, and it was the only state to list green-industry firms as nonessential. Also, New York consumers spent more than low-stringency states, and low-stringency states spent less than high-stringency states for plants. Furthermore, there were no differences in online expenditures between state treatment groups. From a policy perspective, regulation type (i.e., shutting down green-industry sectors as Michigan did) had varying impacts across product categories within the green industry.