Herding in policy responses to coronavirus disease 2019

Abstract Governments have proposed various policy responses to contain the spread of coronavirus disease 2019, but there is little available knowledge about how these policies are formulated. Here we quantify the herding effect in the pandemic containment policies issued by governments of different regions during the period of 18 January 2020 to 29 May 2020, using a modified Lakonishok–Shleifer–Vishny approach. The results show that all the policies exhibit some degree of herding, and the policy herding in the USA is significantly stronger than that of China but weaker than that of the rest of the world. Specifically, the overall herding intensity in the policy responses of the Northern China is greater than that of the Southern China. We believe that policy herding is linked with risk aversion, which is triggered by perceived uncertainty associated with significant risk events. This work highlights the significance of resource sufficiency and preparedness.