The equity-efficiency trade-off and the intensity of COVID-19 pandemic government responses: evidence from US states

The relation between equity and efficiency remains at the heart of regional policy. This study captures the effect of the COVID-19 pandemic government responses on the above-mentioned relation. To do so, we employ cross-sectional data from US states for 2020 and a spatial econometric model specification in the context of Corona policy effects. We find an inverted-'U' relationship between inequality and efficiency. Additionally, the effect of the intensity of government responses to COVID-19 on the equity-efficiency relation depends on the state's per capita gross domestic product (GDP) levels.