Economics of face masks through the lens of Chinese consumers during COVID-19: demand, supply, price, and willingness-to-pay

ABSTRACT

Although the COVID-19 pandemic is no longer a life-threatening pandemic, it has left behind economic challenges worldwide. During the outbreak, many governments mandated the use of face masks in public areas, resulting in its demand and market price immediately skyrocketing. The government may intervene in markets through price, which may lead to market misallocation. This article aims to investigate how consumers form their beliefs about face mask price changes based on their estimations of the market demand and supply, both with and without government intervention, and assess their willingness-to-pay (WTP) for face masks during the pandemic. The data was collected through an online survey of Chinese consumers in 2020. The results provide valuable insights for policymakers to better understand consumers’ price expectations and WTP for face masks, enabling more effective government interventions to maintain market stability while ensuring consumer access to face masks.

KEYWORDS:

• COVID-19
• demand
• supply
• price
• willingness-to-pay

JEL CLASSIFICATION:

• D120
• I120

Disclosure statement

No potential conflict of interest was reported by the author(s).

Ethical approval

This article does not contain any studies with human participants or animals performed by any of the authors. Data were provided by Guozhou University from an online survey they coordinated with Dynata.

Notes

1. n can be negative if the industry shrinks under constraints caused by the pandemic which was the case in the first few weeks after the outbreak. It can also be positive if the industry expands with many of the constraints removed, as in later 2020.

2. There is no fixed date for the start of the pandemic. Two dates can be used as reference points to indicate when people started to wear face masks in public. On January 20, 2020, the China CDC confirmed person-to-person transmission cases. On January 23, 2020, the city of Wuhan was locked down.

Additional information

Funding

We acknowledge the funding support from Guizhou University Agricultural and Forestry Economic Management Domestic First-class Discipline Construction Project [GNYL[2017]002].