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

July 28, 2022
Jouchi Nakajima*1
Masato Takahashi*2
Tomoyuki Yagi*3

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.

JEL classification
D12, E21

Keywords
Online Consumption, COVID-19, Alternative Data

The work in this paper was presented at the 9th Joint Conference organized by the Center for Advanced Research in Finance (CARF) at the University of Tokyo and the Research and Statistics Department of the Bank of Japan. The authors thank Kosuke Aoki, Haruhiko Inatsugu, Seisaku Kameda, Teppei Nagano, Kiyohiko G. Nishimura, Kenichi Sakura, Kosuke Takatomi, Tsutomu Watanabe, and staff members of the Bank of Japan for their valuable comments. The tailor-made dataset from the Survey of Household Economy (from 2015 to 2020) by the Ministry of Internal Affairs and Communications was provided by the National Statistics Center based on the Statistics Act. The de-identified, aggregated dataset of Money Forward ME transactions was provided to the authors by Money Forward, Inc. only for the purposes of this research. The views expressed in this paper are those of the authors and do not necessarily reflect the official views of the Bank of Japan, the Ministry of Internal Affairs and Communications, the National Statistics Center, or Money Forward, Inc.

  1. *1Research and Statistics Department (currently at Hitotsubashi University), Bank of Japan
    E-mail : nakajima-j@ier.hit-u.ac.jp
  2. *2Research and Statistics Department, Bank of Japan
    E-mail : masato.takahashi@boj.or.jp
  3. *3Research and Statistics Department, Bank of Japan
    E-mail : tomoyuki.yagi@boj.or.jp

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