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Effect of Ramadan on purchasing behavior: a panel data analysis

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  • Md Zobraj Hosen

    (Police Headquarters, Bangladesh Police
    Dalhousie University)

Abstract

Current descriptive studies have demonstrated both positive and negative impacts of Ramadan on consumption among Muslims. However, it is crucial to convey a deep understanding of the causal relationships between Ramadan and consumption behavior to inform policymakers and guide the development of efficient policy recommendations. In exploring the dynamic between Ramadan and consumer behavior, this study delves into the causal effects of the holy month on the purchasing patterns of Muslims. Utilizing a natural field experiment, the research examines data from 1837 observations involving 267 Muslim and non-Muslim personnel at the Police Headquarters in Bangladesh. The study employs a difference-in-differences method to isolate the impact of Ramadan and Eid festivities. Our findings reveal a substantial purchase increase among Muslims during these periods— 40.6% during Ramadan and 76.3% for Eid. These results underscore the importance of ensuring a preemptive ample supply of Ramadan- and Eid-related goods in the market to manage demand-pull inflation early in and during Ramadan. Moreover, the study accentuates the necessity for further research on the broader implications of Ramadan on Muslim spending habits across Bangladesh, aiming to inform and guide national economic policies.

Suggested Citation

  • Md Zobraj Hosen, 2024. "Effect of Ramadan on purchasing behavior: a panel data analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(2), pages 325-341, June.
    • Handle: RePEc:spr:inrvec:v:71:y:2024:i:2:d:10.1007_s12232-024-00445-y
    DOI: 10.1007/s12232-024-00445-y
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    References listed on IDEAS

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    5. Scott, A., 1995. "Why id Consumption so Seasonal?," Economics Series Working Papers 99172, University of Oxford, Department of Economics.
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    7. Muhammad Akmal & Muhammad Usman Abbasi, 2010. "Ramadan Effect on Price Movements: Evidence from Pakistan," SBP Working Paper Series 32, State Bank of Pakistan, Research Department.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Ramadan; Purchasing behavior; Muslim consumers; Natural field experiment; Difference-in-differences analysis;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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