Analysis of the Impact of the COVID-19 Outbreak on the Regional Economy:Comparison of Economic Trends by Prefecture

Abstract

The spread of COVID-19 has had a huge impact on the Japanese economy. The Cabinet Office’s Business Trends Index（CI）has declined significantly since March 2020, close to the level in March 2009. In addition, since the number of infected people in each prefecture varies greatly, and the degree of restrictions on economic activities, such as the declaration of a state of emergency being issued and lifted accordingly, the impact of the spread of infection on the economy varies depending on the region and prefecture. Previous studies on Covid-19’s impact on economic trends do not capture the overall economic situation and have not been compared and verified at the prefectural level. On the other hand, understanding the economic impact of various factors in the region, including the spread of coronavirus infections, is essential for examining measures that contribute to economic recovery, and the significance of quantitative analysis of the degree of economic fluctuations and their factors is significant. In this study, we analyzed the impact of the spread of COVID-19 on the local economy, regional differences, and their factors using “prefectural CI” developed by Matsushima and Mitsui. In addition, to more accurately capture the effects of the spread of coronal infection, we also improved the prefectural CI. The prefectural CI is an index that can compare economic trends among all prefectures. It covers the main fields for analyzing economic trends while using indicators common to prefectures, and aims to grasp regional economic trends more accurately than current indicators. © 2022, Japan Section of the Regional Science Association International. All rights reserved.