Changes in Consumption in the Early COVID-19 Era: Zip-Code Level Evidence from the U.S.

Using monthly zip-code level data on credit card transactions covering 16 U.S. cities, this paper investigates changes in consumption at local commercial places during the early coronavirus disease 2019 (COVID-19) era. Since using aggregate-level data can suppress valuable information on consumption patterns coming from zip codes, the main contribution is achieved by estimating common factors across zip codes that are controlled for factors that are zip-code and time specific as well as those that are zip-code and sector specific. The estimation results based on common factors across zip codes show that relative consumption of products and services that can be consumed at home (e.g., grocery, pharmacy, home maintenance) has increased up to 56% amid COVID-19 compared to the previous year, whereas relative consumption of products and services that cannot be consumed at home (e.g., fuel, transportation, personal care services, restaurant) has decreased up to 51%. Similarly, after controlling for the corresponding factors, online shopping has increased up to 21%, while its expenditure share has increased by up to 16% compared to the pre-COVID-19 period.

Relative consumption, relative wealth, and long-run growth: when and why is the standard analysis prone to incorrect conclusions?

We employ a novel approach for analyzing the effects of relative consumption and relative wealth preferences on economic growth. In the pertinent literature, these effects are usually assessed by examining the dependence of the growth rate on the two parameters of the utility function that seem to measure the strength of the relative consumption and the relative wealth motives. Applying our fundamental factor approach, we identify specifications in which the traditional approach yields incorrect qualitative conclusions. The problematic specifications have the common unpleasant property that the parameter that seems to determine the strength of the relative consumption motive actually also affects the elasticity of intertemporal substitution of absolute consumption (and the strength of the relative wealth motive). Since the standard approach is unaware of the additional effect(s), it attributes the total change in the growth rate incorrectly to the change in the strength of the relative consumption motive.

Lending Standards and Borrowing Premia in Unsecured Credit Markets

Using administrative data from Y-14M and Equifax, we find evidence for large spreads in excess of those implied by default risk in the U.S. unsecured credit market. These borrowing premia vary widely by borrower risk and imply a nearly flat relationship between loan prices and repayment probabilities, at odds with existing theories. To close this gap, we incorporate supply frictions – a tractably specified form of lending standards – into a model of unsecured credit with aggregate shocks. Our model matches the empirical incidence of both risk and borrowing premia. Both the level and incidence of borrowing premia shape individual and aggregate outcomes. Our baseline model with empirically consistent borrowing premia features 45% less total credit balances and 30% more default than a model with no such premia. In terms of dynamics, we estimate that lending standards were unchanged for low risk borrowers but tightened for high risk borrowers at the outset of Covid-19. Borrowing premia imply a smaller increase in credit usage in response to a negative shock, which this tightening reduced further. Since spreads on loans of all risk levels are countercyclical, all consumers use less unsecured credit for insurance over the cycle, leading to 60% higher relative consumption volatility than in a model with no borrowing premia.

Consumer expenditure when positional concerns matter

PurposeThe purpose of this paper is to study which factors affect consumer expenditure and how, when positional concerns matter. It also investigates how consumers finance and reallocate their expenditure, and modify their consumer baskets when members of their reference groups spend more on positional goods, and they do not want to lag behind.Design/methodology/approachA literature review is presented, and then a new model is developed from a behavioural economic perspective. It describes how consumers with various risk attitudes reallocate their consumer expenditure and modify their consumer baskets when consumption externalities influence their relative consumption due to a positional game, but they want to “keep up with the Joneses”.FindingsConsumers with different risk attitudes finance and reallocate their consumption expenditures variously to sustain their relative positions. Risk-neutral, slightly and intermediately risk-seeking consumers achieve a lower utility level than others. They do not realise a utility-maximising consumer basket, as it includes a relatively low number of nonpositional goods, but this choice can be considered the best response in a positional game in order to sustain their relative position.Originality/valueThe relationship between positional and nonpositional goods is explicitly described. The model assumes that consumers can be classified based on their risk attitudes when positional concerns matter. It also describes how consumers with various risk attitudes reallocate their consumer expenditure when they want to sustain or improve their relative consumption in a positional game.

Selection of popcorn genotypes tolerant to Spodoptera frugiperda and key traits related to the identification of tolerance

The Spodoptera frugiperda, is one of the most deleterious pests of popcorn and the identification of tolerant genotypes is determinant in breeding programs. The objective of this study was to select popcorn genotypes tolerant to S. frugiperda and the key traits related to the identification of tolerance. The popcorn varieties UEM J1, Composto Márcia, Arachida, Composto Gaúcho and Zapalote Chico (resistant check) were evaluated in a completely randomized design with 100 replications. The experimental unit consisted of one Petri dish, containing plant material and a larva. The following traits were evaluated: larval stage duration (LSt), food intake weight (IW), final larva weight (FW), mean larva weight (MW), feces (F), assimilated (A) and metabolized food weight (M), relative consumption rate (RCR), relative metabolic rate (RMR), relative growth rate (RGR), conversion efficiency of ingested food (CEI), apparent digestibility (AD), conversion efficiency of digested food (CED) and leaf area consumed (LAC). The diagnosis of multicollinearity, analysis of canonical variables, genetic divergence, hierarchical clustering, factor analysis and canonical correspondence analysis were carried out to perform multivariate analysis. After the multicollinearity test, the traits FW, IW, RCR, AD and LAC were maintained for further analysis. Variety Arachida was considered tolerant to S. frugiperda and can be used in the future as a source of favorable alleles to breed tolerant popcorn hybrids. The traits relative consumption rate, apparent digestibility and leaf area consumed were considered key traits in the identification of tolerance against S. frugiperda in popcorn genotypes.

The Spillover Effects of Deregulation in a Three-Country Model

This paper develops a three-country model that incorporates international relocation of firms and explores the macroeconomic effects of deregulation in the services sector by each country. A novel feature of our model is that the international relocation of firms responds to exchange rate movements caused by deregulation shocks in the services sector. From this analysis, it is found that a deregulation shock in a country always benefits the country in spite of the outflows of firms, while it can be detrimental to other two countries, in terms of relative consumption levels.

Consumption of Hydrocarbons and Its Relationship with Ozone Formation in Two Chinese Megacities

Continuous measurements of ozone and its precursors were performed at sites in two Chinese megacities, i.e., an urban site in Beijing and a suburban site in the Pearl River Delta (PRD). At both sites, the total oxidants (O3 + NO2) varied with the ratio of ethylbenzene to m,p-xylenes, which serves as an indicator of photochemical aging. An observation-based method (OBM) was derived for calculating the photochemical consumption of individual non-methane hydrocarbons (NMHCs) based on the observed NMHC concentrations and the ratio of ethylbenzene to m,p-xylenes. The results show a strong correlation between the oxidant level and the derived consumption of precursors at the two sites (R2 = 0.81 for the PRD site and R2 = 0.83 for the Beijing site), demonstrating a strong cause–effect relationship. The relative “consumption efficiency” among NMHCs was calculated based on the integrated amount of hydroxyl radicals derived from the ratio of ethylbenzene to xylenes. Thus, the percent contributions to ozone formation from each individual NMHC can be calculated. This concept of consumption is purely observation-based and provides an easy way to bypass complicated modeling and the necessity of knowing instantaneous concentrations of hydroxyl radicals, which are highly illusive in nature.

Premium, pertalite or pertamax: an empirical study of a-a phenomenon on Indonesian consumer behavior

In Indonesia, consumers can choose to consume high or low quality gasoline based on their preferences. It might be influenced by the price difference between the two qualities. Changing preference to a higher quality that is affected by the declining relative price can lead to an A-A phenomenon. This study aims to determine whether the A-A Phenomenon occurs on the behavior of consumers before and after the existence of Pertalite. The regression model used are the panel data regressions and the regression result proves that there is an A-A phenomenon in market share in Indonesia before and after Pertalite. This indicates that the high difference of relative prices between high and low quality gasolines has a negative impact towards their relative consumption. Prior to Pertalite, consumers continued changing preference into high quality gasoline in the 2nd and 3rd month intervals when relative price difference decreased. After the existing of Pertalite, consumers did not quickly transfer their preferences from Premium to Pertalite when the relative price declined, so that the A-A phenomenon did not occur in this low and middle grade gasoline consumption pattern. However, Pertamax's consumption to Pertalite increases when the relative price between them declines; thus raising the A-A phenomenon.