The novel coronavirus may have lasting effects on consumer habits and employee job expectations even after social distancing guidelines have eased.
Colin Corbett, assistant professor of economics at Bradley University, teaches a course on behavioral economics. He said the financial challenges posed by COVID-19 are causing consumers to rethink their routine spending.
“People are kind of reevaluating their priorities and realizing that some of their rituals and habits weren’t as compelling as they thought they were, or they’re deciding they really want to go back to normal,” Corbett said.
Many behavioral psychologists believe it takes 21 days to make or break a habit. Corbett said that may mean consumers continue to only go shopping once every week or two, as they’ve become accustomed to during quarantine — but they may be eager to return to other habits, like going out to eat.
Another consideration, Corbett said, is consumers’ risk preferences — whether they’ll fear for their own safety or that of others when communal spaces are open for business.
“People who are generally more willing to take risks are going to generally be more willing to go to movie theaters and whatever else once they open up,” he said. “But it also depends on your conscientiousness.”
Corbett said the pandemic is also shifting what kinds of businesses will succeed, both in the immediate and long term. He said things like buffets, sporting events and concert venues are going to suffer until the government permits them to reopen and consumers feel more at ease.
Business models that allow people to enjoy the product from the comfort of their own homes are going to thrive, he said, adding there’s room for innovation.
“At-home entertainment is doing pretty well. Movie studios are releasing movies direct to streaming or direct to homes and actually doing fairly well with that business model right now.”
Corbett said the shelter-in-place period could also have lasting implications for the labor market. People are settling into their work from home routines, he said, and many will want to continue those practices, even after the novel coronavirus has passed.
“Businesses’ willingness to let their employees continue working from home is going to depend a lot on their employees’ productivity at home,” he said. “And if businesses feel like employees aren’t getting as much done at home as they would in the office, then they’re not going to be willing to do that.”
He said employees in skilled industries may have more bargaining power to argue in favor of working from home, and businesses that have a hard time attracting employees may also be forced to offer more flexibility.
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