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Online prices and inflation during the nationwide COVID-19 quarantine period: Evidence from 107 Chinese websites

Author

Listed:
  • Jiang, Tingfeng
  • Liu, Taoxiong
  • Tang, Ke
  • Zeng, Jiaqing

Abstract

Given the lack of activity in China's offline economy during the COVID-19 quarantine period, online prices provide new insights for analyzing the impacts of the pandemic on the economy. Using online prices from 107 websites in China and the DiD method to remove the Spring Festival effect, we show that the pandemic leads to a 0.4% surge in the overall inflation rate, a 20% decrease in the price change probability, and a 1% decline in the size of absolute price changes. Moreover, the pandemic had heterogeneous impacts on different sectors, leading to significant structural changes in inflation. Specifically, the pandemic hindered the price correction behavior after Spring Festival, and whether products could be consumed while customers stayed at home was an important factor affecting price adjustment and inflation dynamics.

Suggested Citation

  • Jiang, Tingfeng & Liu, Taoxiong & Tang, Ke & Zeng, Jiaqing, 2022. "Online prices and inflation during the nationwide COVID-19 quarantine period: Evidence from 107 Chinese websites," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003865
    DOI: 10.1016/j.frl.2022.103166
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    References listed on IDEAS

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    Cited by:

    1. Hammouda, Amira & Saeed, Asif & Vidal, Marta & Vidal-García, Javier, 2023. "On the short-term persistence of mutual fund performance in Europe," Research in International Business and Finance, Elsevier, vol. 65(C).
    2. Edoardo Beretta & Doris Neuberger, 2023. "Monetary aggregates in the US since 2020 and post-COVID-19 inflation: evidence from the equation of exchange," Economics and Business Letters, Oviedo University Press, vol. 12(4), pages 321-330.
    3. Bouri, Elie & Nekhili, Ramzi & Kinateder, Harald & Choudhury, Tonmoy, 2023. "Expected inflation and U.S. stock sector indices: A dynamic time-scale tale from inflationary and deflationary crisis periods," Finance Research Letters, Elsevier, vol. 55(PA).
    4. Svetlana Fedoseeva & Ellen Van Droogenbroeck, 2023. "Pandemic pricing: Evidence from German grocery e‐commerce," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1139-1156, October.

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    More about this item

    Keywords

    COVID-19 pandemic; Online prices; Stay-at-home economy; Inflation; Price stickiness;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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