Evaluation of household spending pattern pre and post lockdown across different baskets of goods

Abstract

COVID-19 resulted in a disruption in the lifestyle and buying patterns of people. The direct and indirect effects of the pandemic are mediated mainly through the economics of the household. Drastic changes were noticed due to government policies, people’s ethnocentrism, etc. The emphasis has always been on saving money during such pandemics arising out of the increased fear of unemployment due to a significant downfall in the global economy. During the lockdown, people could not move out of their houses, which affected their regular consumption patterns. They cause a decline in consumers’ demand for goods and services, leading to a collapse in economic activity. This paper attempted to measure this change in consumer spending pattern due to the pandemic. In this research, primary interviews of consumers were done to develop hypotheses that were then tested based on an online survey questionnaire. This questionnaire was designed based on the hypotheses that were to be tested, and a total of 406 responses were garnered through online surveys and telephonic interviews. The survey demography had some biases but was a decent representative of the Indian population. Based on the survey results, it has been observed that the savings percentage has not increased for most of the households despite the economic shock of the pandemic. People have started to pursue online channels to buy goods, spend on online entertainment services, and are also focusing more on fruits and vegetables than packaged food. This research also presents the key market implications of these behavioral changes. The paper also tries to build regression models for spending on different product categories. But not many insights could be drawn from these models as they had very low explanation power because of the low number of observations in the model. Overall, it can be said that there have been certain behavioral changes in consumer saving and spending patterns. But large-scale research is required to make these conclusions with absolute certainty.