Researchers say business failures rise substantially when customers are forbidden to patronize them

VERMILLION — A new study from the University of South Dakota finds that once governors and mayors forbid people from going to businesses, it’s far more likely those businesses will fail.

“We ran the data through the model several times after making appropriate adjustments — best-case, worst-case, and so forth, and each time the results were the same — more failures,” Dr. Elizabeth Corbin said. “It’s uncanny. It’s almost a near-certainty that government actions aimed at forbidding people to spend money at businesses so that their owners can make a living results in failure of that business.

“We operated off of the theory that money spent and money earned go hand-in-hand when it comes to business owners making it or not making it in a free-market society,” Corbin continued. “There is a direct — and I mean direct — connection between actual income and being able to survive as a business.

“When there are no government-imposed restrictions on patronizing a business, the business tends to do much better, purely from an economic and financial standpoint,” Corbin continued. “This was across the board too — all industries, all types of businesses, large, medium, small. All of them require income in order to make it.”

Asked about whether direct government payments to businesses would mitigate closures, Corbin was dismissive.

“No, businesses really do need customers,” she said. “Again, our research is conclusive.”

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