What pandemic inflation tells: Old habits die hard

Zeynep Kantur () and Gülserim Özcan

Economics Letters, 2021, vol. 204, issue C

Abstract: COVID-19 has led to changes in individuals’ consumption habits, which will cause the calculation of inflation based on the average consumption basket to give distorted information. Using debit and credit card spending data of Turkey, we build CPI weights and compute an alternative pandemic consumption basket price index for Jan 2020–Feb 2021. Our findings show that the pandemic inflation is higher than the official inflation rate during the first lockdown, suggesting a behavioral change in consumption. However, in the reopening period, old habits come back. During the second lockdown, the difference between the pandemic and the official inflation rates is trivial in comparison with the first lockdown.

Keywords: Inflation; COVID-19; Consumption behavior; Card transaction data (search for similar items in EconPapers)
JEL-codes: C43 D12 E21 E31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:204:y:2021:i:c:s0165176521001841

DOI: 10.1016/j.econlet.2021.109907

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