An Assessment of Online Consumption Trends in Japan during the COVID-19 Pandemic

Jouchi Nakajima, Masato Takahashi and Tomoyuki Yagi
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Jouchi Nakajima: Bank of Japan
Masato Takahashi: Bank of Japan
Tomoyuki Yagi: Bank of Japan

No 22-E-11, Bank of Japan Working Paper Series from Bank of Japan

Abstract: Online consumption in Japan has increased significantly since the outbreak of the COVID-19 pandemic. However, many issues remain unclear, such as what kind of households have increased their online consumption and whether the increase in online consumption is temporary or highly persistent. In this paper, we provide an empirical analysis of online consumption trends during the pandemic, using (i) granular tailor-made data from the Survey of Household Economy by the Ministry of Internal Affairs and Communications and (ii) aggregated figures computed from transaction data from "Money Forward ME," the personal financial management service provided by Money Forward, Inc. Our empirical results based on these datasets up to December 2020 show that online consumption in Japan increased among a wide range of age and income groups, that many households engaged in online consumption for the first time during the pandemic, and that most of these households continued to engage in online consumption. While it should be noted that the results are based on a limited observation period, they suggest that the increase in online consumption likely is highly persistent. If such changes in household behavior are indeed highly persistent, they may have important implications for Japan's economy.

Keywords: Online Consumption; COVID-19; Alternative Data (search for similar items in EconPapers)
JEL-codes: D12 E21 (search for similar items in EconPapers)
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