What kind of cities are more vulnerable during the COVID-19 crisis?

Abstract

While the COVID-19 crisis is taking an economic toll, none of us know the magnitude of it. The objective of this paper is to provide some ballpark estimates for declines in sales taxes by simulating business revenue change in two subsectors most harshly hit during the crisis, retails, and food and accommodations. We apply for municipal governments in Ohio based on detailed locational information from the InfoGroup Historical Business Data. While every metropolitan area, as well as nonmetropolitan area, has winning and losing cities, smaller places dependent on apparel or automobile outlets, restaurants, and tourism can suffer as much as a half of sales tax. In the meantime, the largest cities seem to be affected moderately.