How are the Impacts of the Covid-19 Pandemic Estimated on the Economic and Industrial Sectors?

Since February 2020, the coronavirus pandemic has caused a deep and severe economic recession, certainly the most severe since the 1929 crisis. It has caused a significant fall in economic activity in almost all countries, with a few exceptions. This has had an impact on almost every industry. Air transport, tourism, transport equipment and construction were strongly affected while others such as telecommunications and electronic media performed well with significant growth.

One important question is, how are the impacts of the Covid-19 pandemic estimated on the economic and industrial sectors?

Basic Methods

An example of such methods is to compare, over a period of one year or a few quarters, the projection of the dependent variable to actual observations. Differences between actual and projected values can be fully or partially attributed to the impact of the pandemic of Covid-19.    

Time Series Approaches  

Some time series models can help in measuring the impact of an intervention or shock on the dependent variable. For example, the Box-Jenkins model with intervention function can help to estimate the impact of the pandemic on  the dependent variable.

Econometric Approaches  

Econometric models, whether macroeconomic or vertical (transportation, tourism, manufacturing  etc.), allow, among other things, to study and measure the effects of variations in independent variables integrated in the model on the endogenous variables.

For example, the macroeconomic model of the French economy « Mesange » (Insee and DG Trésor) allows us to assess the impact on the French economy (GDP, consumption, employment…) of external shocks, such as the Covid-19 pandemic.

 Qualitative Approaches

Some qualitative methods can be used to assess the impact of the pandemic on sales of any product or service.   These are estimation methods based on the perception, evaluation and judgment of managers and experts. With their knowledge, expertise and experience, these people are able to estimate the loss of revenue due to the pandemic.

Several of these methods were published in an article recently posted on PREDIBLOG,