Consumer Behavior and Food Prices during the COVID-19 Pandemic: Evidence from Chinese Cities

Economic Inquiry, forthcoming

63 Pages Posted: 14 Dec 2021 Last revised: 17 Dec 2021

See all articles by Bixuan Yang

Bixuan Yang

University of Florida - Food & Resource Economics Department

Frank Asche

Stavanger University College

Tao Li

University of Florida - Department of Finance, Insurance and Real Estate

Date Written: December 11, 2021

Abstract

We find that Chinese consumers responded strongly to government restrictions during the COVID-19 crisis. Our event-study framework shows that emergency declarations raised average food prices by as much as 7.8 standard deviations of the price change distribution, with a much larger effect on non-perishable vegetable prices (e.g. 17.0 standard deviations for Chinese cabbage prices). The effects of lockdowns were smaller but longer-lasting. These results suggest that consumers panic bought non-perishables under emergency declarations while under lockdowns there was a sustained increase in demand for non-perishables. Such consumer behavior likely caused sizable losses in consumer welfare, especially among poor households.

Keywords: Food prices, COVID-19 pandemic, demand shocks, event-study analysis

JEL Classification: Q11, Q18

Suggested Citation

Yang, Bixuan and Asche, Frank and Li, Tao, Consumer Behavior and Food Prices during the COVID-19 Pandemic: Evidence from Chinese Cities (December 11, 2021). Economic Inquiry, forthcoming, Available at SSRN: https://ssrn.com/abstract=3982785

Bixuan Yang (Contact Author)

University of Florida - Food & Resource Economics Department ( email )

P.O. Box 110249
Gainesville, FL 32611-0249
United States

Frank Asche

Stavanger University College ( email )

PO Box 2557
Ullandhaug
4004 Stavanger
Norway

Tao Li

University of Florida - Department of Finance, Insurance and Real Estate ( email )

Warrington College of Business
Gainesville, FL 32611
United States

HOME PAGE: http://warrington.ufl.edu/contact/profile.asp?WEBID=7628

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