The economic impacts of Ebola on firms in Sierra Leone

Katherine Casey (Stanford), Rachel Glennerster (J-PAL), and Tavneet Suri (MIT) have initiated a research project studying the firm-level impact of the Ebola crisis in Sierra Leone. Our objective is twofold: first, to bring reliable quantitative data to the policy discussion as the outbreak unfolds in real time; and second, to establish baseline information on the private sector that can help inform the post-outbreak economic rebuilding effort.  We view this project as a small way in which those of us working in the private sector and with expertise in economics can help contribute to the recovery effort.

In particular, we aim to explore the cost of the outbreak on firms, unpack the channels of the effect – depressed consumer demand, trade restrictions, and capital and labour market disruptions – and look at the response of firms and consumers to the crisis.

To achieve this, we are surveying large and medium firms in Sierra Leone to capture impacts on their revenues, input costs, labour, exports/imports, investments and liquidity.  The first survey round will collect retrospective monthly data dating back to immediately before the outbreak; and subsequent rounds will update these figures via brief phone calls to participating businesses. We shall also link into an established broader literature around how firms react to deep uncertainties in their market environments.

With this data we can isolate the economic impact of Ebola from other simultaneous factors by comparing firms in sectors that have been more affected to those less affected before and after the outbreak.  We will further triangulate and cross validate these estimates with data from two other surveys we have already completed: a nationally representative survey of 4000 households, which looks at how citizens are responding to the outbreak; and monthly price and food availability surveys in 180 informal markets countrywide.

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