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The effect of COVID-19 lockdown and the subsequent reopening on consumption in Iran
Mohammad Hoseini1,2, Abolmohsen Valizadeh1
1Institute for Management and Planning Studies (IMPS), Tehran, Iran.
Abstract:
We use country-wide data on all electronic payments in point-of-sale (POS) and online terminals of Iran to study the change in the pattern of consumption and online-offline substitution during the COVID-19 lockdown and after the relaxation of restrictions in May and June. Using a difference-in-difference approach, we find that during the strictest lockdown month, growth in value of transactions dropped by 41% compared to the benchmark month before the pandemic. After lifting the lockdown, the growth rose by 12% above the benchmark month. We also find that the COVID-19 pandemic led to a spike in online transactions of activities with online terminals and has had a persistent effect on consumer preference for online shopping even after the reopening of the economy.
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