U009-0005
The effect of COVID-19 on sales revenue in Seoul, South Korea: A Spatial Panel Approach

Thursday, 10 December 2020
Heeyeun Yoon, Seoul National University, Department of Landscape Architecture and Rural Systems Engineering, College of Agriculture and Life Science, Seoul, Korea, Republic of (South), Yeankyoung Hahm, Seoul National University, Seoul, South Korea and Yunwon Choi, Seoul National University, Research Institute of Agriculture and Life Sciences, Seoul, South Korea
Abstract:
COVID-19 or coronavirus disease 2019 pandemic has struck the world. As of July 2020, the cumulative confirmed cases amount to 16.64 million in 213 countries, among which more than 0.656 million died. The number of new infection cases still increases exponentially, while the global hotspots have shifted from east Asia and some European countries to American continents recently. 90% of the countries in the world have imposed entry/ immigration restrictions and quarantine requirements to the international travelers or completely close their borders, consequently the number of international travels dropped by 20-30% compared to the same season of 2019.

Domestically, governments have implemented unprecedently strong preventive measures that have affected people’s lives to the point that new norms are created. Commercial or religious venues were ordered closed because they were prone to hold activities requiring close contact among people. Education institutes are closed or hold online classes, and businesses have adopted remote-work strategies to reduce the chance of potential human-to-human transmission of the virus. The sudden modifications of conventional routines might affect the effectiveness, hence the lower productivity. It is projected that the global economy will shrink by 5.2% this year, according to the World Bank.

While macroeconomic projections began to be presented cautiously, microeconomic consequences of COVID-19 in everyday lives has not been studied yet. How do the people react to the spread of COVID-19? How do they conform with the preventive measures? We can observe the behavioral patterns via their consumptions. In this backdrop, we aim to investigate the relationship between the retail revenue and the COVID-19, in the context of Seoul, South Korea, for the five months of the period from Jan. 2020 to May 2020. We use spatial panel model to address the spatially heterogeneous relationship between the retail revenue and the PM10 level, while assessing the strength of its spatial dependence. We hypothesize that in a day of a confirmed cases, people reduce outdoor activities, which would result in declining revenue of retailers.

Support: NRF-2017S1A5A8020226, MOE -2018001310002, and Creative-Pioneering Researchers Program of Seoul National University SNU-500-20170162

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