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The financial incentivization and communication effects of a government’s postpandemic measure: The “go-to-travel” campaign and consumer behaviors in Japan

Takumi Tagashira

No E-2021-01, TDB-CAREE Discussion Paper Series from Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University

Abstract: This study empirically explores how a government policy seeking to induce consumer demand impacts consumer behavior in the postpandemic context. The COVID-19 pandemic significantly changed global economic, political, and business structures. Financial incentivization is a typical economic intervention to boost consumer demand. This study leverages a quasi-experiment involving the “go-to-travel” campaign, a government intervention designed to induce domestic travel demand in Japan, and empirically assesses the effects of a public policy on postpandemic consumer behavior. However, consumers in a specific area were ineligible to participate. Utilizing this structure, this study conducts difference-in-differences specification with two-way fixed-effect models. The results show no significant effect of eligibility for the go-to-travel campaign. However, additional analyses reveal that even ineligible consumers traveled more frequently after campaign implementation when controlling for individual fixed effects, frequency of going out for other purposes, and infection rates. This study implies the importance of the government communication effect in that the policy itself is observable to ineligible consumers, and this observability affects consumer behavior.

Keywords: COVID-19; Business recovery; Economic measure; Tourism; Two-way fixed effect (search for similar items in EconPapers)
Pages: 45 p.
Date: 2021-04
Note: Updated: 29th March 2021
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http://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/71659/070careeDP-E-2101.pdf

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