Jerry Li Topic State your general topic and explain why it is interesting. The unexpected pandemic in 2019 thoroughly changed the way people living. Initially, the widespread and severe outbreak forced people to stay at home for classes, work, and shopping. So far, people have gradually adapted to a new way of life, coexisting with the virus, and continuing to work hard for the complete disappearance of the virus. But now we're still living in the lingering effects of the virus outbreak. In response to the global epidemic, each country has adopted different policies and behaviors to maintain its own economic level. So, I'm interested in how the pandemic has changed and affected people and the responses and attitudes of various countries to the epidemic. Question State the specific research question you want to examine and explain why it is interesting. Provide potential answers to your question, giving reasons for each of them. Discuss which potential answer(s) you find most plausible and why. My research question is “What impact does the Coronavirus have on China consumption”. Since the impact of the epidemic on the world economy is huge, I want to know how much impact the epidemic has had on the economy in different country, and how countries have saved their own economies from such an impact. Every country has a different way of dealing with the epidemic, and among them China has adopted the most extreme but most effective “Zero Covid strategy”, which has undoubtedly changed people's way of life to the greatest extent. Therefore, I am interested in study the changes in people's consumption behavior caused by the epidemic in China. From a glimpse of this aspect of the economy, we can gain insight into the impact of the epidemic on the global economy as a whole and reflection on effectiveness of policies that each countries did to recover the economy. Jerry Li Theory State the specific economic theories that you think relate to your question and what those theories imply for answering it. Cite papers related to your question, or that answer questions similar to it. Explain how these papers use the theory to get their answers and mention any data they use. Infectious diseases can directly increase the health cost of residents, hinder the accumulation of human capital, reduce labor hours, and ultimately have a negative impact on long-term economic growth(Xiang,2021). In the early days of the COVID, due to the large-scale outbreak of the epidemic in Wuhan, China, all offline stores, companies, and schools were ordered to close their doors, and everyone stopped working and quarantined at home. As a result, most companies faced tight cash flow, supply chain disruption, and widespread market supply and demand. Due to pressures such as downturn, the labor force has been greatly reduced. Thus, labor can be link with the dynamic spread of infectious diseases to macroeconomic fluctuations. Residents provide labor for manufacturers for income, which is then distributed between consumption and investment. Manufacturers use the labor provided by residents and the capital generated by investment accumulation to carry out product production activities. Therefore, by studying the core macroeconomic variable of labor supply, the impact of the epidemic can be seen from economic models(Xiang,2021). The study of consumption can help us understand how individual behavior affects the input and output in the economy. Therefore, the economic impact of COVID-19 can be directly reflected in people’s consumption data. After the outbreak, consumption patterns showed a strong negative sensitivity to the severity of the public health crisis(Chen,2020). When the public health situation worsened, consumption also fell sharply. Therefore, managing the public health crisis is critical to revitalizing the economy. When consumer demand pulls back due to uncertainty, economic relief programs may have limited effect without effective public health interventions to contain the spread. Consumer theory is the study of how people decide to spend their money. Understanding how consumers work makes it easier for suppliers to predict which of their products will sell more, and allows economists to better grasp the shape of the overall Jerry Li economy(Daniel,2021). In the post-epidemic era, people's consumption habits have changed dramatically. People are more inclined to shop online than go out to shop, so more e-commerce and live streaming will become a pandemic. When suppliers respond to consumers' spending habits, it will be easier for people to spend money to quickly recover the economy after the epidemic. Data Describe the data you plan to use to answer your question, who/where these data are from, how you will access it, and which specific variables you plan to use. State the time period and countries covered by the data you will use for your analysis. What is the unit of observation in your data (individuals, households, states, countries, etc.)? The data I am planning to use is the universe of offline consumption using debit/credit card and mobile QR codes (the most common payment method in China) related to CNY from July 2018 to July 2019, which is before the pandemic and after the pandemic, in China. The data can be found from China UnionPay Merchant Services Corporation. I am planning to split the consumption in to Daily Necessity, Food & Drink, Travel, and Shopping for individuals. I am also planning to use the data of daily cumulative confirmed cases, cumulative deaths, and cumulative recovered case tracking of Covid in China from July 2018 to July 2019 from Our World in Data. By combining the data of Covid number of confirmed cases and the offline consumption, we could find out how the trend varied before and after pandemic. Empirical Strategy Describe in general terms how you plan to use your data to answer your question. What is (are) the key relationship(s) that you will examine to answer your question? What do you expect to see in the data that will enable you to decide which potential Jerry Li answer is the best. At this stage you do not necessarily need to state the specific visualizations and/or regressions you plan to do, but if you do, try to explain what the results will tell you about the answer to your question. From the data of offline consumption and Covid case tracking, we can create a visualize plot to show the relationship between the Covid case and the offline consumption. It is expect to see that as the cumulative confirmed cases increase, the offline consumption of in all areas are decrease especially in Travel and Shopping , so that it will show that the outbreak of COVID-19 severely hit the average offline consumption and changed people’s consumption behavior, since people are more likely turn to online shopping. References Chen, Haiqiang, et al. “The Impact of the COVID-19 Pandemic on Consumption: Learning from High Frequency Transaction Data.” SSRN Electronic Journal, 2020, https://doi.org/10.2139/ssrn.3568574. Xiang, Lijin, et al. “The COVID-19 Pandemic and Economic Growth: Theory and Simulation.” Frontiers, Frontiers, 1 Jan. 1AD, https://www.frontiersin.org/articles/10.3389/fpubh.2021.741525/full#h4. Liberto, Daniel. “Consumer Theory Definition.” Investopedia, Investopedia, 19 May 2021, https://www.investopedia.com/terms/c/consumer-theory.asp.
