Reviews of Related Literature and Studies

This chapter includes all the gathered ideas, consolidated information, published

thesis, generalizations and conclusions, and methodologies which are related and has

similarity to the present study which is all about the Impact of COVID-19 Pandemic in

Consumption and Investment.

Related Literature

Lenzen M, Li M, Malik A, Pomponi F, Sun Y-Y, Wiedmann T, et al. (2020)

determined the maximum level of global consumption that is possible under given

(exogenous) output of economic cutback which directly causes and has a great impact

from the of shutdowns of different industries, restrictions in travels and lockdowns. The

difference between on the peak level and the initial level of COVID 19 in the world

economy are the losses of consumption. The consumption losses have great effect in

the supply-chain effects that ripple in the world economy, and show to intensive losses

of the employment, income and deletion of emissions. It is not only the economy has

great impact in of the pandemic, it also affects the environment. It also brought the

depletion of air pollution and greenhouse gas and the decrease of fossil fuel

consumption as the aircrafts are grounded, land and water transportation are reduced,

trade and industry are impeded, and factories are closed.

Hall, M. C., Prayag, G., Fieger, P. and Dyason, D. (2020) studied Beyond Panic

Buying: Consumption Displacement and COVID 19 to evaluate consumption

displacement, the shift in consumption occurs when consumer experience a change in

the availability of goods, services and amenities to which they are accustomed as the
result of an external event, and which is characterized by the points in space and time

where consumption occurs and by the movements to, from, and between those points,

that is occurring as a result of the effects of COVID-19 on the services sector in the

Canterbury region of New Zealand.

As a result of the effects of COVID-19 the authors of the article point out the

designs of utilization displacement for the retail sectors as defined by ANZSIC. They

answer the 4 what, when, why, when and how consumption displacement happens.

The following findings furnish a strong proof of temporal and spatial displacement

of utilization based on consumer spending designs. The proofs of increased spending in

some utilization and consumption categories verifies stockpiling behaviours. The sector

of hospitality encounters the sharp downturn in consumer disbursing over lockdown.

According to Erin Voegele (2020), The COVID-19 pandemic is anticipated to

impact U.S. electricity consumption. The U.S. Energy Information Administration’s latest

Short-Term Energy Outlook, released on May 12, predicts that retail sales of electricity

in the commercial sector will fall by 6.5 percent in 2020 because many businesses have

closed and many people are working from home. The retail in industry sales of

electricity are also anticipated to fall by 6.5 percent his year as many factories cut back

production. In addition, deal of electricity in U.S. to the residential zone are anticipated

to be down 1.3 percent due to lower electricity demand caused by milder winter and

summer weather, which is offset slightly by increased household electricity consumption

as much of the population spends relatively more time at home.

 When it comes to demand, there are studies in different countries which are

investigating the general food consumption behaviour during Covid-19 pandemic. The

first available research in relation to the topic is conducted by two researchers (Dr. Ann

Veeck and Dr.Hu Xie) from the Western Michigan University. The researchers

conducted a survey in China between February 15 and February 23 2020, where they

examined food consumption behaviour during the pandemic. The main findings are that

due to people stay more time at their homes, they increased online shopping of food.

Some respondents were reporting that they ordered food online for the first time.

Further findings are that previously people were buying fruits and vegetables mainly

from markets, but since the epidemic, this has changed and they buy it through online

businesses. Furthermore, many people reported increasing the perceived healthiness of

their diet to increase immunity (Markin S., 2020).

Related Studies

The study of Ozili, P. and Arun, T. (2020) on the Spillover of COVID-19: Impact

on The Global Economy focus on the question how does the COVID 19 affects the

global economy which the answer lies in two methods by which coronavirus stifled

economic activities. First, the spread of the virus encouraged social distancing which led

to the shutdown of financial markets, corporate offices, businesses and events. Second,

the exponential rate at which the virus was spreading, and the heightened uncertainty

about how bad the situation could get, led to flight to safety in consumption and

investment among consumers, investors and international trade partners.

The findings reveal that the increasing number of lockdown days, monetary

policy decisions and international travel restrictions severely affected the level of
economic activities and the closing, opening, lowest and highest stock price of major

stock market indices. In contrast, the imposed restriction on internal movement and

higher fiscal policy spending had a positive impact on the level of economic activities,

although the increasing number of confirmed coronavirus cases did not have a

significant effect on the level of economic activities.

It can be concluded in the study of Gerő, D. (2020) that till recent times the

organic food consumption is at a low level in Hungary, but the demand for organic food

is growing steadily. However, based on this thesis findings, there is a potential

opportunity for the Hungarian organic market to further grow. Some tendencies of

Hungarian consumer have also been identified such as the high price sensitivity due to

the average low salaries, which comes as a disadvantage when studying organic food

consumer behavior, as organic products have higher prices.

However, based on the findings from the survey, it can be concluded that Covid-

19 is changing the Hungarian organic consumer behavior in a great extent. Increase in

purchase frequency has been found as a result of Covid-19, meaning that people who

were buying less often before the pandemic are intending to change that and buy more

in the future. Another interesting finding was to see how much the distribution channels

for organic products have changed as a result of Covid-19. It was found on the basis of

our survey that in the future they prefer the organic markets which were followed by

special organic stores and retail chains. There is also a positive attitude towards organic

products change have been identified due to their perceived health benefits and

qualities.
 Hassen, T.B., and El Bilali, H. (2020) conducted a study on the Impact of

COVID-19 on Food Behavior and Consumption in Qatar. The study is based on an

online survey in Qatar using a structured questionnaire that was administered in the

Arabic language through the Survey Monkey platform from 24 May until 14 June 2020.

According to the result of their study, people spending more time at home and dining

out becoming less accessible, we noticed a major shift in people’s attitudes and

behaviors concerning food and health. Indeed, there have been clear changes in the

way consumers are eating, shopping, and interacting around food. The results indicated

a shift toward a healthier diet during the COVID-19 pandemic. Consumers reduced their

consumption of unhealthy foods such as fast food, unhealthy snacks, candy, cookies,

cakes, and pastries. At the same time, they are eating healthier, including more fresh

fruits and vegetables and healthy snacks and drinking more water. The consumption of

local Qatari food products also increased due to food safety concerns. With the COVID-

19 pandemic, uncertainty around the spread of the virus remains and consumers

increasingly want to know where the food they buy comes from. Consumers’ unfounded

perceptions, that imported food products could pose a safety risk, involved a preference

for locally produced items.

Chebli, A. (2020) explore the impact of the coronavirus pandemic (Covid-19) on

tourist behaviour and identifies intentions to change tourist behaviour that will emerge

as a result of this pandemic. The study is designed to be a polite study. 308 travellers,

selected on a non-probabilistic basis, participated in this pilot research. The data

collected were subjected to Chi-square test of goodness of fit test statistical analysis

and content analysis.

 The study concluded that Due to the global panic caused by Covid-19, the

pandemic is having an effect on travel intentions. Therefore, stakeholders in the tourism

industry need to be resilient and consider how to overcome all the apocalyptic

predictions. This study aimed to provide an exploratory overview of the changing

behaviour of tourists in a society at risk.

Kim, S., Koh, k. and Zhang, X. (2020) examined the short-term impact of

COVID-19 on consumption spending and labor market outcomes. Using monthly panel

data of individuals mainly aged 50–70 in Singapore, they find that COVID-19 cutback

the utilization of disbursing and the labor of market results promptly after its pandemic,

and its negative effect instantly evolved. At its maximum level, the outbreak cutback the

total household utilization disbursing by 22.8% and labor income by 5.9% in April. The

chance of full-time tasks and works also declined by 1.2 pp and 6.0 pp in April and May,

sequentially, but over all employment were only affected slightly. Heterogeneity analysis

designate that the decrease in utilization disbursing was prominent among the people

with lofty net worth, while the falling of labor market results were prominent among

those with lower net worth. However, small proof that those in bad health status

encountered the big cutback utilization disbursing and labor market results. Cutbacks in

utilization disbursing corresponded with higher risk avoidance behavior, worsening

economic outlook, the globally initial lockdown and lowered income.

The outbreak of this COVID 19 give rise to and created a great economic shock

nationwide due to business interruptions and shutdowns from social-distancing

measures. Martin, A., Markhvida, M., Hallegatte, S. and Walsh, B. (2020) assessed

the socio-economic effect of the pandemic on every individual, a micro-economic model

came about to approximate the effect of distancing on individuals’ savings, utilization,

income, and poverty. The model presumes two periods: a predicament period during

which some household experience a lower income and can utilize their savings to keep

the consumption; and a healing period, when individuals save to refill their depleted

savings before the crisis level. The San Francisco Bay Area is used as example of a

case study and the effects of a lockdown are quantified, accounting for the effects of

unemployment insurance (UI) and the CARES Act federal stimulus. Presuming a hunker

period of three months, the rate of poverty for the time being expanded from 17.1% to

25.9% in the Bay Area in the truancy of social defense, and the economical lowest

earnings would tolerate the most in relative terms. If it is implemented fully, the

combination of CARES and UI could maintain the higher probability of poverty relatively

close to lowest point, and decreases the average healing time, for the households who

greatly suffered in loss of income, from 11.8 to 6.7 months. Nonetheless, the

seriousness of the effect in economic is spatially different, and certain area are more

ostentatious than the normal and could take a year and beyond to heal. In general, the

model is a first procedure in quantifying the residential-level effects of the pandemic at a

regional scale.

Using census tract data, a household-level economic model is built, divided into

two periods: a predicament period during which some household experience a lower

income and can utilize their savings to keep the consumption; and a healing period,

During the pandemic period, the most affected people will tolerate a loss of income,

based on the sector of industry, and utilization of earnings to refill consumption.

 Mainly, the results and findings of this study are stated. First, if there’s no any

social defense and protection, the pandemic would lead to a great economic shock to

the system. In simulations of a 3-month lockdown, the poverty rate increases from

17.1% to 25.9% during the crisis in the Bay Area. Household savings and consumption

drop significantly, and the average recovery time for individuals is almost one year. The

long recovery time after the crisis will be further exacerbated by a general decrease in

demand, people’s change in consumption behavior, and general slowdown of economic

activities. Second, government benefits, both state UI and federal CARES stimulus,

decrease the amplitude and duration of the crisis. In likely scenario of a 3-month crisis

period, the increase in poverty can be limited to 19% (from 17.1% at pre-crisis), and the

average time Economics of Disasters and Climate Change (2020) 4:453–479 471 of

recovery almost halved to 6.7 months, thanks to the state UI and the federal stimulus

package. However, the recovery is spatially heterogeneous, as certain communities will

be impacted more than the average and could take over a year to replenish their lost

savings. A near perfect implementation of CARES Act, with 90% of unemployed

individuals receiving benefits, could even lead to a slight temporary decrease in the

poverty rate in the Bay Area from 17.1% to 16.5%, since the unemployment

compensation is higher than pre-crisis income for certain individuals. Further work will

explore the impact of indirect and macro-level impacts, the role of uncertainty in

households’ decision-making and the consequences in case of multiple waves of social

distancing and the possible effect in case of simultaneous exogenous shocks (e.g.,

natural disasters). Indeed, these results are particularly important when considering the

risk of multiple shocks: where the COVID-19 crisis is forcing most households to use
their savings (especially in countries with weak social protection system), the population

becomes much more vulnerable to any other shocks, including other natural disasters

(e.g., tropical storms, with the hurricane season starting in the Caribbean on June 1st,

earthquakes, a 5.5 magnitude earthquake hit Zagreb, Croatia on March 22, 2020 during

the lockdown) or the financial and economic secondary impact from the expected

recession. Beyond this first modeling exercise, the model can be used in other countries

or regions, and provide assessment of the potential impact from the “shelter-in-place

mandates”, as well as the benefits from different options to provide emergency income

support.

Summary of Related Studies

Authors and Focus of the Study Methodology Findings

Date

Ozili, P. and How did a health crisis They draw on real The findings reveal
Arun, T. translate to an world observations that the increasing
(2020) economic crisis? Why in assessing the number of lockdown
did the spread of the restrictive days, monetary policy
coronavirus bring the measures, monetary decisions and
global economy to its policy measures, international travel
knees? fiscal policy restrictions severely
measures and the affected the level of
public health economic activities
measures that were and the closing,
adopted during the opening, lowest and
period. They highest stock price of
empirically examine major stock market
the impact of social indices.
distancing policies
on economic
activities and stock
market indices.

Gerő, D. How does the Covid- Researcher present Covid-19 is changing

(2020) 19 pandemic changing the Research the Hungarian
the organic food design, Research organic consumer
purchasing behaviour strategy, research behavior in a great
and attitudes of approach, Data extent. It was found
consumers towards sources, Data on the basis of our
organic food products collection method, survey that in the
in Hungary? Sample design, future they prefer the
Sampling, Data organic markets
Analysis and ethical which were followed
considerations. by special organic
stores and retail
chains. There is also
a positive attitude
towards organic
products change
have been identified
due to their perceived
health benefits and
qualities.

Hassen, T.B., To investigate the The study is based The results indicated
and El Bilali, immediate impacts of on an online survey a shift toward a
H. (2020) COVID-19 on Qatari in Qatar using a healthier diet during
consumer awareness, structured the COVID-19
attitudes, and questionnaire that pandemic.
behaviors related to was administered in Consumers reduced
food consumption. the Arabic their consumption of
language. unhealthy foods such
as fast food,
unhealthy snacks,
candy, cookies,
cakes, and pastries.
The consumption of
local Qatari food
products also
increased due to food
safety concerns.

Chebli, A. The study aims to 308 travelers, The study concluded

(2020) explore the impact of selected on a non- that Due to the global
the coronavirus probabilistic basis, panic caused by
pandemic (Covid-19) participated in this Covid-19, the
on tourist behaviour pilot research. The pandemic is having
and identifies data collected were an effect on travel
intentions to change subjected to Chi- intentions. Therefore,
tourist behaviour that square test of stakeholders in the
 will emerge as a result goodness of fit test tourism industry need
of this pandemic. statistical analysis to be resilient and
and content analysis consider how to
overcome all the
apocalyptic
predictions.

Kim, S., Koh, Examined the short- Uses monthly panel COVID-19 reduced
k. and Zhang, term impact of COVID- data of individuals consumption
X. (2020) 19 on consumption mainly aged 50–70 spending and labor
spending and labor in Singapore. market outcomes
market outcomes. immediately after its
outbreak, and its
negative impact
quickly evolved.
Consumption
spending was greater
among those with
higher net worth,
while the decreases
in labor market
outcomes were
greater among those
with lower net worth.

Martin, A., Evaluated the socio- Using census tract The main findings of
Markhvida, economic impact of data, a household- this study are the
M., COVID-19 on level economic following. First,
Hallegatte, S. individuals, a micro- model is built, without any social
and Walsh, economic model is divided into two protection, COVID-19
B. (2020) developed to estimate periods: (1) crisis would lead to a
the direct impact of period, which massive economic
distancing on simulates the shock to the system.
household income, duration of the In simulations of a 3-
savings, consumption, shelter-in-place month lockdown, the
and poverty. order and poverty rate
subsequent loss of increases from 17.1%
income and (2) the to 25.9% during the
recovery period. crisis in the Bay Area.
Household savings
and consumption
drop significantly, and
the average recovery
time for individuals is
almost one year.
Synthesis

Several studies relate to the Impact of Covid-19 on Consumption and Livelihood

across various countries. These literature and studies are all points of considerations

and references as to completion of this study.

Ozili, P. and Arun, T. (2020) noted the relationship of health crisis to economy

specifically economic crisis brought about by Corona virus. Their study has drawn real

world observations in assessing the restrictive measures, monetary policy measures,

fiscal policy measures and the public health measures that were adopted during the

period. They empirically examined the impact of social distancing policies on economic

activities and stock market indices. The findings revealed that the increasing number of

lockdown days, monetary policy decisions and international travel restrictions severely

affected the level of economic activities and the closing, opening, lowest and highest

stock price of major stock market indices.

Gerő, D. (2020) whose study is focused on the effect of Covid 19 to purchasing

behavior of consumers in Hungary specifically on preference to organic foods. He

presented research design, research strategy, research approach, data sources, data

collection method, sample design, sampling, data analysis and ethical considerations.

His study revealed that Covid-19 is changing the Hungarian organic consumer behavior

in a great extent. The survey attested that in the future consumers will prefer the organic

markets which were followed by special organic stores and retail chains. There is also a

positive attitude towards organic products change have been identified due to their

perceived health benefits and qualities.

 To investigate the immediate impacts of COVID-19 on Qatari consumer

awareness, attitudes, and behaviors related to food consumption, Hassen, T.B., and El

Bilali, H. (2020) based their study on an online survey in Qatar using a structured

questionnaire that was administered in the Arabic language. The results indicated a shift

toward a healthier diet during the COVID-19 pandemic. Consumers reduced their

consumption of unhealthy foods such as fast food, unhealthy snacks, candy, cookies,

cakes, and pastries. The consumption of local Qatari food products also increased due

to food safety concerns.

The impact of the coronavirus pandemic (Covid-19) on tourist behaviour and

identifies intentions to change tourist behavior that emerge as a result of this pandemic

was explored by Chebli, A. (2020). In his study, 308 travelers, selected on a non-

probabilistic basis, participated in a pilot research. The data collected were subjected to

Chi-square test of goodness of fit test statistical analysis and content analysis The study

concluded that Due to the global panic caused by Covid-19, the pandemic is having an

effect on travel intentions. Hence, stakeholders in the tourism industry need to be

resilient and consider how to overcome all the apocalyptic predictions.

The short-term impact of COVID-19 on consumption spending and labor market

outcomes was studied by Kim, S., Koh, k. and Zhang, X. (2020). The study used

monthly panel data of individuals mainly aged 50–70 in Singapore. COVID-19 reduced

consumption spending and labor market outcomes immediately after its outbreak, and

its negative impact quickly evolved. Consumption spending was greater among those

with higher net worth, while the decreases in labor market outcomes were greater

among those with lower net worth.

 Martin, A., Markhvida, M., Hallegatte, S. and Walsh, B. (2020) evaluated the

socio-economic impact of COVID-19 on individuals, a micro-economic model is

developed to estimate the direct impact of distancing on household income, savings,

consumption, and poverty Using census tract data, a household-level economic model

is built, divided into two periods: (1) crisis period, which simulates the duration of the

shelter-in-place order and subsequent loss of income and (2) the recovery period. Their

study found out that without any social protection, COVID-19 would lead to a massive

economic shock to the system. In simulations of a 3-month lockdown, the poverty rate

increases from 17.1% to 25.9% during the crisis in the Bay Area. Household savings

and consumption drop significantly, and the average recovery time for individuals is

almost one year.

We can say that the current corona virus situation is profoundly impacting the

economy. With the temporary cessation of some local and international businesses and

activities slowing down, the consequences of this pandemic are even worse in global

economy. And some country with quarantine measures continuously reducing some

economic activities. The global demand and supply should be back to normality. Indeed,

to achieve this result, policymakers have been obliged to review policies in order to

mitigate the severity of the impact, but the virus remains the last factor which will decide

when each country can get back to its ordinariness. The pandemic will continue to

disturb the global market therefore it is essential that we all work together to

successfully get through this challenging time.

References:

Literature
Hall, M. C., Prayag, G., Fieger, P. and Dyason, D. (2020). Beyond Panic Buying:

Consumption Displacement and COVID 19. Journal of Service Management. Vol.

ahead-of-print No. ahead of print. http://www.doi.org/10.1108/JOSM-05-2020-0151

Lenzen M, Li M, Malik A, Pomponi F, Sun Y-Y, Wiedmann T, et al. (2020). Global socio-

economic losses and environmental gains from the Coronavirus pandemic. PLoS ONE

15(7): e0235654. https://doi.org/10.1371/journal.pone.0235654

Markin, S. (2020, March 19). Food Consumption Behavior during COVID-19 Pandemic.

Western Michigan University News. https://www.wmich.edu

Voegele, E. (2020, May 12). EIA: COVID-19 to Impact US Electricity Consumption.

BIOMASS Magazine. http://www.biomassmagazine.com/articles/17037/eia-COVID-19-

to-impact-us-electricity-consumption

Studies

Chebli, A. (2020). The Impact Of Covid-19 On Tourist Consumption Behaviour : A

Perspective Article. Journal of Tourism Management Research, 7, No. 2, pp. 196-207.

https://www.researchgate.net/publication/343058098

Gerő, D. (2020). Organic food consumption in Hungary During Covid-19 pandemic.

Master’s program in Culture, Communication and Globalization.

https://www.google.com

Hassen, T.B. and El Bilali, H. (2020). Impact of COVID-19 on Food Behavior and

Consumption in Qatar. Article in Sustainability,12, 6973.

http://www.mdpi.com/journal/sustainability
Kim, S., Koh, k. and Zhang, X. ( 2020). Short-Term Impact of COVID-19 on

Consumption and Labor Market Outcomes: Evidence from Singapore. IZA – Institute of

Labor Economics. https://www.iza.org

Martin, A., Markhvida, M., Hallegatte, S. and Walsh, B. (2020). Socio-Economic Impacts

of COVID-19 on Household Consumption and Poverty. Economics of Disasters and

Climate Change (2020) 4:453–479. https://doi.org/10.1007/s41885-020-00070-3

Ozili, P. and Arun, T. (2020). Spillover of COVID-19: Impact on The Global Economy.

University of Essex, United Kingdom.

https://www.researchgate.net/publication/340236487