Citation:

Yusnan Zulfikar Fauzi, Firmansyah. "Analysis of Income for Consumption: Before and During the World's COVID-19 Pandemic" International Research Journal of Economics and Management Studies, Vol. 2, No. 4, pp. 285-289, 2023.

Abstract:

Throughout history, humanity and its civilizations have been recurrently afflicted by various disease outbreaks, such as the Black Death, Cholera, Spanish Influenza, SARS, Avian Influenza, and H1N1 Influenza. Such epidemics are unpredictable and invariably result in profound health and economic repercussions. A disease outbreak that extends across global boundaries is termed a pandemic. This research endeavors to investigate the relationship between income levels and consumption patterns by employing the absolute income hypothesis theory in the context of the pre-and during the COVID-19 pandemic periods globally. The methodology involves categorizing nations according to income levels defined by the World Bank's established criteria and conditions. The research utilizes cross-sectional data on Gross Domestic Product (GDP) per capita and household consumption expenditures per capita, analyzed through the Ordinary Least Square (OLS) regression technique. The findings of this study revealed several key insights: (1) There is a positive correlation between income and household consumption, validating the absolute income hypothesis theory. (2) The theory remains applicable even during crisis periods. (3) Populations in countries classified as low, lower-middle, upper-middle, and high-income exhibit rational economic behaviors.

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Keywords:

Income, Consumption, Absolute Income Hypothesis, COVID-19, World Bank Income Groups.