A National Bureau of Economic Research survey of small businesses finds that when firms are told to expect a one-month crisis, the expectation of remaining open by the end of the year hovers around 70% across all industries with the exception of Arts and Entertainment, and Personal Services. In those industries, the expectation of remaining open drops to 65% and 57% respectively.
When firms are told to expect a six-month crisis, the average expectation of remaining open falls to 38%, and there is significant heterogeneity between sectors. The expected survival probability for firms in Arts and Entertainment drops precipitously to 35% if the crisis lasts 6 months. The expected probability of being open for Personal Services firms fall to 22% if the crisis lasts six months.
The restaurant industry seems particularly vulnerable to a long crisis. Restaurateurs believe that they have a 72% chance of survival if the crisis lasts one month, but if the crisis lasts six months, then they expect to survive with only a 15% probability. Likewise, the chance of survival for firms in tourism and lodging drops to 27% by the 6-month mark.
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