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The Impact of an Epidemic Outbreak on Consumer Expenditures:An Empirical Assessment for MERS Korea

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  • Hojin Jung

    (College of Business Administration, Hongik University, 94 Wausan-ro, Mapo-gu, Seoul 121-791, Korea)

  • Minjae Park

    (College of Business Administration, Hongik University, 94 Wausan-ro, Mapo-gu, Seoul 121-791, Korea)

  • Kihoon Hong

    (College of Business Administration, Hongik University, 94 Wausan-ro, Mapo-gu, Seoul 121-791, Korea)

  • Eunjung Hyun

    (College of Business Administration, Hongik University, 94 Wausan-ro, Mapo-gu, Seoul 121-791, Korea)

Abstract

In this paper, we investigate the effect of an epidemic outbreak on consumer expenditures. In light of scanner panel data on consumers’ debit and credit card transactions, we present empirical evidence that outbreaks cause considerable disruption in total consumer expenditures with significant heterogeneity across categories. Our findings strongly imply that customers alter their behaviors to reduce the risk of infection. The estimated effect of an epidemic outbreak is qualitatively different from that of other macroeconomic factors. The implications of this research provide important guidance for policy interventions and marketing decisions aimed at sustaining economic growth.

Suggested Citation

  • Hojin Jung & Minjae Park & Kihoon Hong & Eunjung Hyun, 2016. "The Impact of an Epidemic Outbreak on Consumer Expenditures:An Empirical Assessment for MERS Korea," Sustainability, MDPI, vol. 8(5), pages 1-15, May.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:5:p:454-:d:69575
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    References listed on IDEAS

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    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > MERS

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