Effect of Ramadan on purchasing behavior: a panel data analysis

Md Zobraj Hosen ()
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Md Zobraj Hosen: Police Headquarters, Bangladesh Police

International Review of Economics, 2024, vol. 71, issue 2, No 9, 325-341

Abstract: Abstract Current descriptive studies have demonstrated both positive and negative impacts of Ramadan on consumption among Muslims. However, it is crucial to convey a deep understanding of the causal relationships between Ramadan and consumption behavior to inform policymakers and guide the development of efficient policy recommendations. In exploring the dynamic between Ramadan and consumer behavior, this study delves into the causal effects of the holy month on the purchasing patterns of Muslims. Utilizing a natural field experiment, the research examines data from 1837 observations involving 267 Muslim and non-Muslim personnel at the Police Headquarters in Bangladesh. The study employs a difference-in-differences method to isolate the impact of Ramadan and Eid festivities. Our findings reveal a substantial purchase increase among Muslims during these periods— 40.6% during Ramadan and 76.3% for Eid. These results underscore the importance of ensuring a preemptive ample supply of Ramadan- and Eid-related goods in the market to manage demand-pull inflation early in and during Ramadan. Moreover, the study accentuates the necessity for further research on the broader implications of Ramadan on Muslim spending habits across Bangladesh, aiming to inform and guide national economic policies.

Keywords: Ramadan; Purchasing behavior; Muslim consumers; Natural field experiment; Difference-in-differences analysis (search for similar items in EconPapers)
JEL-codes: D01 D12 D63 D90 Z12 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12232-024-00445-y

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