The impact of COVID-19 related ‘stay-at-home’ restrictions on food prices in Europe: findings from a preliminary analysis

This study examines the impact of COVID-19 related ‘stay-at-home’ restrictions on food prices in 31 European countries. I combine the European Union’s Harmonised Index of Consumer Prices (HICP) with the Stay-at-Home Restriction Index (SHRI) from the Oxford COVID-19 Government Response Tracker (OxCGRT) dataset for January–May 2020. The results of a series of difference-in-difference regression models reveal that the severity of stay-at-home restrictions increased overall food prices by 1% in March 2020, compared to January and February 2020. The price level for food continued to rise in the high stay-at-home restriction countries relative to thier counterpart in April but stabilised in May. The food categories that witnessed the most significant surges in prices were meat, fish & seafood, and vegetables. The prices of bread & cereals, fruits, milk, cheese & eggs and oils & fats were not significantly affected. The correlations between food prices and stay-at-home restrictions were significant after controlling for cross-country variations in COVID-19 affectedness and other mitigation and adaptation measures, such as international travel controls, road closures and the size of the economic stimulus packages. This study presents the first empirical evidence of food price inflation as an unintended consequence of COVID-19 pandemic containment measures in one of the most severely hit continents of the world.