The Influence of the Middle East Respiratory Syndrome Outbreak on Online and Offline Markets for Retail Sales

Eunae Jung and Hyungun Sung
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Eunae Jung: Department of Urban Engineering, Chungbuk National University, 52 Naesudong-ro, Seowon-gu, Cheongju, Chungbuk 361-763, Korea
Hyungun Sung: Department of Urban Engineering, Chungbuk National University, 52 Naesudong-ro, Seowon-gu, Cheongju, Chungbuk 361-763, Korea

Sustainability, 2017, vol. 9, issue 3, 1-23

Abstract: This study investigates whether the Middle East Respiratory Syndrome (MERS) outbreak in Korea affected online and offline retail sales and determines the presence of a substitution or delay effect between the two. We analyze the monthly retail sales of electronic goods, semi-luxury goods, and groceries using an autoregressive integrated moving average (ARIMA) model with intervention. The findings are as follows. First, offline sales of electronic goods declined by 7.9%, while online sales increased by 7.03%, indicating that these markets can act as substitutes. Second, the offline sales of semi-luxury goods decreased for two months, while online sales remained the same, indicating that there can be a delay effect in the offline market. Finally, despite the slight increase in online sales and the moderate decrease in offline sales, the MERS outbreak did not have a statistically significant effect on grocery sales. Our research findings imply that stakeholders such as the government and retail provided useful information on how to deal with the unexpected outbreak

Keywords: Middle East Respiratory Syndrome (MERS); online market; offline market; substitution effect; delay effect; retail sales (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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