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What and how did people buy during the Great Lockdown? Evidence from electronic payments

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  • Bruno Carvalho
  • Susana Peralta
  • Joao Pereira dos Santos

Abstract

This paper uses novel and comprehensive data on electronic payments from SIBS, the main provider of point of sale terminals and on-line payments in Portugal, to study the impact of the Great Lockdown on purchases. The data aggregates all individual transactions into monthly observations, by municipality and sector, between 2018 and 2020. We employ a difference-in-differences event study that relies on the assumption that the monthly evolution of purchases in the first four months of 2020 would be parallel to that of the two previous years. We identify a massive causal impact on overall purchases, from a baseline year-on-year monthly growth rate of 10% to a decrease of 45%. The sign and magnitude of the impact varies considerably across sectors. Purchases of essential goods such as supermarkets and groceries increase mildly, contrasting with severe contractions in sectors that were closed by government order or depend heavily on tourism, including the leisure industry and restaurants. We find suggestive evidence of initial stockpiling of goods, postponing of essential expenditures, and rapid recovery of purchases in tech and entertainment, possibly to adapt to the confinement. Transactions with foreign-owned cards cause an even greater negative contraction. We disentangle the total effect into the intensive margin of the average transaction and the extensive margin of the number of transactions. Buyers adjust their shopping strategies in rational ways to minimize public health risks: they go less often to supermarkets and buy more each time, and visit local groceries more.

Suggested Citation

  • Bruno Carvalho & Susana Peralta & Joao Pereira dos Santos, 2020. "What and how did people buy during the Great Lockdown? Evidence from electronic payments," Working Papers ECARES 2020-20, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/307531
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    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic consequences > Consumption

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    3. Arceo-Gomez, Eva O. & Campos-Vazquez, Raymundo M. & Esquivel, Gerardo & Alcaraz, Eduardo & Martinez, Luis A. & Lopez, Norma G., 2023. "The impact of COVID-19 infection on labor outcomes of Mexican formal workers," World Development Perspectives, Elsevier, vol. 29(C).
    4. Bui, Dzung & Dräger, Lena & Hayo, Bernd & Nghiem, Giang, 2020. "Consumer Sentiment During the COVID-19 Pandemic: The Role of Others‘ Beliefs," Hannover Economic Papers (HEP) dp-680, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät, revised Apr 2021.
    5. de Palma, André & Vosough, Shaghayegh & Liao, Feixiong, 2022. "An overview of effects of COVID-19 on mobility and lifestyle: 18 months since the outbreak," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 372-397.
    6. van der Wielen, Wouter & Barrios, Salvador, 2021. "Economic sentiment during the COVID pandemic: Evidence from search behaviour in the EU," Journal of Economics and Business, Elsevier, vol. 115(C).
    7. Long Hai Vo & Kirsten Martinus & Brett Smith, 2023. "A Demand Systems Approach to Understanding Medium‐Term Post‐Pandemic Consumption Trends," Economic Papers, The Economic Society of Australia, vol. 42(2), pages 183-199, June.
    8. Bruno P. Carvalho & Susana Peralta & João Pereira dos Santos, 2022. "Regional and sectorial impacts of the Covid‐19 crisis: Evidence from electronic payments," Journal of Regional Science, Wiley Blackwell, vol. 62(3), pages 757-798, June.
    9. Hernan Bejarano & Pedro Hancevic & Hector M. Nunez, 2021. "Impacto economico del COVID-19 en negocios pequenos y medianos bajo restricciones voluntarias e impuestas," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 18(2), pages 23-56, Julio-Dic.
    10. Gabe Todd & Florida Richard, 2021. "Impacts of Jobs Requiring Close Physical Proximity and High Interaction with the Public on U.S. Industry Employment Change During the Early Stages of the COVID-19 Pandemic," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(3), pages 1163-1172, July.
    11. Gabe, Todd & Crawley, Andrew, 2020. "A Note on the Reduction in Hospitality Sales Prior to a State’s COVID-related Stay-at-Home Order: Evidence from Maine, USA," MPRA Paper 102362, University Library of Munich, Germany.
    12. Raymundo M. Campos-Vazquez & Gerardo Esquivel, 2021. "Consumption and geographic mobility in pandemic times. Evidence from Mexico," Review of Economics of the Household, Springer, vol. 19(2), pages 353-371, June.
    13. Cristina Manteu & Sara Serra & Sónia Cabral & Cátia Silva, 2021. "Consumption expenditure during the COVID-19 pandemic: an analysis based on Portuguese card transaction data," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    14. Todd Gabe & Andrew Crawley, 2021. "Effects of the COVID-related stay-at-home order on hospitality sales and automobile traffic counts: evidence from the State of Maine, USA," Economics and Business Letters, Oviedo University Press, vol. 10(4), pages 336-341.
    15. Fazel Hesham & Harizi Riadh & Nasr Khouadja Sihem, 2021. "What Have We Learned about the Effects of the COVID-19 Pandemic on Consumer Behavior?," Sustainability, MDPI, vol. 13(8), pages 1-23, April.
    16. Bui, Dzung & Dräger, Lena & Hayo, Bernd & Nghiem, Giang, 2023. "Macroeconomic expectations and consumer sentiment during the COVID-19 pandemic: The role of others’ beliefs," European Journal of Political Economy, Elsevier, vol. 77(C).
    17. Dräger, Lena & Bui, Dzung & Nghiem, Giang & Hayo, Bernd, 2021. "Consumer Sentiment During the COVID-19 Pandemic," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242375, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Portugal; Covid-19; transaction data; consumer behavior; sectoral impacts;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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