Income Per Capita and Spread of COVID-19 in Catalan Municipalities

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Income per capita and spread of COVID-19 in Catalan municipalities

Regional Quantitative Analysis Research Group (AQR–UB) AQR COVID-19 / #8

Barcelona, May 13th 2020

BACKGROUND

Throughout the month of March and the beginning of COVID-19 and some factors of interest, such as the so- April, the COVID-19 was transmitted exponentially in the cioeconomic level of the population in the different terri- population of Catalonia, with a slowdown in subsequent tories. In this sense, the higher relative number of infec- days, possibly associated with the implementation of tions in BHA with a lower socioeconomic level compared population confinement. to those with the highest socioeconomic level has had an impact not only on the Catalan and Spanish press but The increasing availability of data on the spread of the also on international media.iii disease with territorial detail is making it possible to mo- nitor the spatial distribution of the epidemic and link its However, the analysis of the spatial distribution by BHA incidence to various characteristics of the territories. implies a representation of the territory with deep detail Although it has been suggested that the expansion of the of the areas with the highest population density. Thus, disease has been more intense in territories with less the city of Barcelona has around sixty BHA, Badalona has favored socioeconomic situations, the evidence on the 13, L'Hospitalet de Llobregat 12, etc. On the other hand, relationship between the spatial distribution of income in other areas of the Catalan territory, a very high num- per capita and COVID-19 is still scarce. This analysis is the ber of municipalities remain within a single BHA: the main objective of this research note, and complements Urgell Plan and rural Penedès have 18 municipalities, previous analysis of the AQR Research Groupi. and another 24 BHA include 10 municipalities or more. This means that the analysis that has been carried out In the Catalan case, the Open Government portal of the with BHA has a very important urban bias, insofar as ii Generalitat de Catalunya , through the RSAcovid19 regis- urban areas have a much higher weight in the set of te- try of the Department of Health, has been providing sin- rritories analyzed. In contrast, a municipal analysis ce the end of March, data regarding the impact of COVID allows give greater weight to all the territories, to the -19, both for the case of the municipalities and of the extent that the largest and smallest municipalities play a Basic Health Areas (BHA). With these data, for example, similar role into the analysis. the Catalan Agency for Health Quality and Assessment (AQuAS) has been producing maps of the number of A first analysis with this information leads to a more ro- positive cases of COVID-19, and of the corresponding bust result in relation to that obtained previously by BHA rate per 10,000 inhabitants. This has allowed measure in terms of a synthetic index of socioeconomic level: relationships between the geographical distribution of specifically, income per capita has a positive correlation

This note summarizes some of the results on the analysis of the geographical distribution of COVID-19 in Catalonia that is being carried out by re- searchers from the AQR Research Group of the UB (http://www.ub.edu/ aqr/). Special emphasis is placed on considering geographic and territorial aspects, facts of special interest in the research for the group.

The detailed results that have been used in this note are available to the interested reader.

Josep Lluís Carrion-i-Silvestre, Antonio Di Paolo, Alicia García, Enrique López-Bazo, Jordi López-Tamayo, Alessia Matano, Rosina Moreno, Ernest Pons, Raul Ramos, Vicente Royuela and Jordi Suriñach have participated in the preparation of this note.

Income per capita and spread of COVID-19 in Catalan municipalities with the expansion of COVID-19 until April 10th (chosen OBJECTIVE as the reference date), although the relationship seems to be non-linear. Specifically, from a certain income The implications of the relationship between the com- threshold, increases in income would not lead to a munity spread of COVID-19 and, in general terms, the higher incidence of the disease but quite the opposite, income level of the population in the different territories as can be seen in Figure 1 where the fitted line in the is important enough to deserve a detailed analysis. In scatterplot of the data has a quadratic shape. Further- fact, several studies have shown how the spatial varia- more, the association between the two variables seems tion in the spread and impact of other infectious disea- to have changed over time, as seen in Figure 2, where a ses, such as the 1918 Spanish flu, was related to the in- greater association is observed during the first weeks of come level of each territory, its unemployment rate, and v of the pandemic, and decreases as the confinement ta- the educational level of its population . kes effectiv . Therefore, this research note aims to synthesize the evi- Figure 1. dence obtained in the analysis of the relationship between the spread of COVID-19 in the population of the municipalities of Catalonia and their income level, controlling for the effect of other factors that may also have affected, to a greater or lesser extent, to the spread of the epidemic in each territory.

As indicated before, the existing evidence referring to other pandemics suggests that the spread of the disease could vary between different groups of the population

depending on social and economic characteristics. Thus, given the diversity in the distribution of the characteris-

tics of the population, a different degree of incidence of COVID-19 can be expected in the different municipalities, as well as a diverse evolution of the incidence. In this sense, a greater expansion in those territories with a Source: Own elaboration based on data from the RSAco- greater economic activity is expected, since it is plausible vid19 registry of the Departament de Salut de la Gene- to expect more frequent and more intense interactions ralitat de Catalunya and the National Institute of Statis- between people in the daily development of their work. tics. Similarly, we can argue the possibility that the spread of SARS-CoV-2 may have been lower in places with higher Figure 2. incidence of unemployment or, more generally, with less labor participation (given the lower interaction with other people). In fact, apart from the above, there are other channels through which we can argue the possible existence of an inverted U-shaped relationship between income levels and the spread of the disease. For example, researches from the United Kingdom and the Barce- lona Metropolitan Areavi show a lower use of public transport among the highest-income groups, which could have reduced the possibilities of contagion during the initial phase of expansion of the disease. On the other hand, there is evidence on how in the United States the possibilities of teleworking are clearly higher in those occupations that also offer higher levels of income, which is confirmed by the importance of having high- speed internet connections that also come more easily to areas with higher income. Finally, some studies have found robust results on the existence of a positive asso- Source: Own elaboration based on data from the RSAco- ciation between income and health levelsvii, as well as a vid19 registry of the Departament de Salut de la Gene- ralitat de Catalunya and the National Institute of Statis- greater propensity among higher-income individuals to tics. go to health centers for possible symptoms. This mecha- nism has already been discussed in the case of COVID-19 for New York City neighborhoods.ix

Income per capita and spread of COVID-19 in Catalan municipalities

The data reproduced in Table 1 suggests that, in fact, the PROPAGATION OF COVID-19 incidence of the disease has been higher in the municipalities with the highest income per capita, with some AND INCOME PER CAPITA notable exception, as is the case of the Tarragona municipality of Caseres, with a low level of income and a very A first step in the study of the relationship between the high rate of COVID-19 cases, or the municipality of Sal- income per capita of the municipality and the communi- des (Berguedà), with just the reverse situation. ty spread of the disease is the comparison of the geographical distribution of these two variables. Regarding Figure 4. the first, Figure 3 shows the municipal distribution of the rate of positive cases of COVID-19 in some diagnos- tic test (PCR or rapid test) for 10,000 inhabitants accumulated until April 10th, from the RSAcovid registry19. It can be seen that, as revealed in various media, the distribution of the disease is not uniform throughout the Catalan territory.

Figure 3.

Source: Own elaboration based on data from the Muni- cipal Income Atlas of the National Statistics Institute

Table 1. Rate of COVID-19 cases on April 10th per 10,000 inhabitants. according to level of income per capita

Source: Own elaboration based on data from the RSAco- vid19 register of the Departament de Salut of the Gene- ralitat de Catalunya

To assess the impact of economic factors on the spread of the disease, our study has used information on the level of income per capita, published by the National Institute of Statistics (INE) in the Income Distribution Atlas, with information from income per capita and household for 2016.

The territorial distribution of the value of income per capita is shown in Figure 4, where a higher level of income is seen in municipalities in the vicinity of the Barce- lona Metropolitan Area, as well as in several municipalities in Girona and the Pyrenees. Comparison of the maps in Figures 3 and 4 allows us to conclude a certain Note: Own elaboration based on data from the RSAcovi- relationship between the incidence of the disease and d19 registry of the Departament de Salut of the Genera- the level of income, in line with the dispersion graph litat de Catalunya and the National Statistics Institute. shown in Figure 1. The values are reproduced by the 10 municipalities with higher and lower income per capita values.

Income per capita and spread of COVID-19 in Catalan municipalities

To clarify whether there is indeed a relationship between income per capita in various regression models that suc- income and the spread of the virus, a multiple regression cessively consider the accumulated infection rate for the analysis has been performed where, in addition to the days from March 11th to April 22nd. Around March 20th measure of income per capita, we use several factors, the parameter associated with the income indicator be- such as the incidence of unemployment between the comes significant, remaining practically flat during the population of the municipalityx, real estate wealth, popu- rest of the periodxii. lation density, meteorological and pollution conditions, a set of demographic factors, and various indicators of li- - Finally, its effect has been calculated throughout the ving conditions and population mobility. distribution of the infection rate, using a quantile regression. In this way, it is possible to assess whether the The estimated effect is clearly positive, confirming that effect of income varies throughout the distribution of the incidence of the disease is higher in those territories the contagion rate, conditioned to the other factors. with a higher income level, which could be related to the Figure 7 shows how there are no significant differences higher levels of economic activity in those richer territo- between quantiles, so the income effect is significant for ries. Estimates show an important association, so that for practically all quantiles of incidence rates. each additional thousand euros of municipal income per capita, the rate of COVID-19 cases per 10,000 inhabitants on April 10th increases above 4%. It is important to indi- Figure 5. cate that this effect is robust to the use of various income indicators (income per capita, income per household, and taxable base declared in income tax, with and without logarithmic transformations)xi.

On the other hand, even though with a negative linear correlation with the COVID-19, the effect of the unemployment indicator ceases to have a significant correlation once it is controlled for by other factors. Likewise, the level of real estate wealth, despite having a positive correlation, stops being significant when controlling by other factors.

The analysis carried out has explored various additional aspects of the effect of income on the spread of the di- Note: Own elaboration based on data from the Departa- sease: ment de Salut of the Generalitat de Catalunya and the National Statistics Institute. Estimation of the marginal - As mentioned above, there are different arguments that effect of income per capita on the rate of COVID-19 ca- would justify the existence of an inverted U-shaped rela- ses per 10,000 inhabitants, using a quadratic model tionship (quadratic relationship) between the contagion with income per capita in logarithms. rate and the income level. As seen in Figure 5, the marginal effect of income per capita on the contagion rate is more important for low municipal income levels. As inco- Figure 6. Income impact throughout the infection pro- me increases, the additional impact of 1,000 more euros cess in income is lower. This converges to a turning point around an average per capita income of € 15,500, which is a high income close to that, for example, of the city of Barcelona (€ 15,389 per capita), the municipalities of Sitges (€ 15,478) or Fontanals de Cerdanya (€ 15,566). The municipalities with higher income show, on average, lower levels of infection than those in the city of Barcelo- na, following the example.

- The evolution of the impact of income on the intensity of the infection rate has been evaluated. Figure 6 shows the log-term effect of income per capita on the infection rate. The graph shows the parameter associated with 2016

Income per capita and spread of COVID-19 in Catalan municipalities

Figure 7. CONCLUSION

Although the evidence obtained so far cannot be conclu- sive, the results obtained show a positive, significant and robust association between the level of income per capita and the spread of COVID-19 in the Catalan municipalities. To the extent that the level of income per capita was an indicator of economic activity, it would confirm a significant impact of this on the infection rate, which is reduced, however, for higher levels of incomes (a result that could be explained by the lower use of public transport among this group, the higher opportunities for teleworking, as well as higher initial levels of health or health habits of this population, among others). In order to ma- ke a more precise evaluation of this association, it would Note: Own elaboration based on data from the Departa- be necessary to have information on the evolution of the ment de Salut of the Generalitat de Catalunya and the National Statistics Institute. Estimate of the effect of activity over time and its impact on the evolution of the income per capita in logarithms in the deciles of the disease. This fact brings additional concern to public ma- conditional distribution of the COVID-19 step rate per nagers, who will have to face, at the same time, the con- 10,000 inhabitants. trol of the epidemic and the maintenance of the living conditions of the most vulnerable population.

Regional Quantitative Analysis Research Group (AQR) University of Barcelona Faculty of Economics and Business Departament of Econometrics, Statistics and Applied Economics Av. Diagonal 690, 08034 Barcelona Contact: [email protected] www.ub.edu/aqr

i In particular the Research Note AQR COVID-19 / #3 “Has the socioeconomic situation of the territory affected the spread of COVID-19?” https:// www.ub.edu/aqr/covid19/?p=152&lang=en ii http://governobert.gencat.cat/ca/dades_obertes/dades-obertes-covid-19/index.html iii As an example, see https://www.reuters.com/article/health-coronavirus-innercity/feature-poor-city-dwellers-run-greatest-coronavirus-risk- idUSL8N2BV2HD iv It must be taken into account the fact that in the first days of the period analysed many municipalities do not have any positive case of Covidien- 19. As time progresses, the number of municipalities without cases decreases, which may affect the correlation between income and the Covidien- 19 rate. v See, for example, Grantz K.H. et al (2016) Disparities in influenza mortality and transmission related to sociodemographic factors within Chicago in the pandemic of 1918. Proc. Natl. Acad. Sci., 113(48), 13839-13844 i Suhrcke et al (2011) The impact of econonomic crises on communicable disease transmission and control: A systematic review of the evidence. PLoS ONE 6(6) e20724. vi Paulley, N et al. (2006), The demand for public transport: The effects of fares, quality of service, income and car ownership,Transport Policy, 13 (4), pp. 295-306, https://doi.org/10.1016/j.tranpol.2005.12.004. Asensio, J. (2002), Transport Mode Choice by Commuters to Barcelona’s CBD. Urban Studies, 39 (10), 1881–1895. https:// doi.org/10.1080/0042098022000003000 vii Dingel, J., Neiman, B. (2020), How Many Jobs Can be Done at Home?, https://bfi.uchicago.edu/working-paper/how-many-jobs-can-be-done-at- home/ Chiou, L., Tucker, C. (2020), Social Distancing, Internet Access and Inequality, NBER WP 26982, http://www.nber.org/papers/w26982 viii Marmot, M. (2002), The Influence Of Income On Health: Views Of An Epidemiologist, Health Affairs, 21 (2), pp. 31-46, https://doi.org/10.1377/ hlthaff.21.2.31. ix Borjas, G. J. (2020), Demographic Determinants of Testing Incidence and COVID-19 Infections in New York City Neighborhoods, NBER WP 26952, http://www.nber.org/papers/w26952. x The unemployment rate is a variable whose information is only available at the provincial level from the Labor Force Survey. However, it is possible to obtain the unemployment registered by the municipalities, information that, combined with the potentially active population (aged between 15 and 64) of each municipality, has allowed us to construct a ratio that approximates a relative measure of the importance of unemployment at the municipal level. xi The information on the tax base declared in the 2016 income tax has been obtained from the Institut d’Estadística de Catalunya (Idescat). xii Let us recall the potential impact that this simple correlation may have on considering only a subsample of municipalities with positive cases at the beginning of the period. In any case, as of April 10th, the reference date in the entire analysis, this circumstance has a much smaller effect.