Effects of Covid-19 On Consumer Behavior: Ecuador Case
Effects of Covid-19 On Consumer Behavior: Ecuador Case
Abstract
Confinement as one of the measures decreed in the health emergency by the Ecuadorian government to counteract the impact
of the SARS-CoV-2 or Covid-19 virus, has been reflected in consumer behavior. The purpose of this study is to know the effects
that this emerging measure causes in the consumption behavior of people, using the measurement of variables related to per-
sonal, social, psychological and cultural factors. A sample of 658 consumers was surveyed in five cities in Ecuador: Cuenca,
Guayaquil, Loja, Machala and Quito. The Structural Equation Model (SEM) was used to check the theoretical hypotheses.
These theories were accepted considering three dimensions: the loads of the indicators analyzed through the Loadings test> 0.7;
the internal consistency reliability measured through the Cronbach Alpha composite reliability test (CR)> 0.7, for the constructs
of purchasing behavior, social, personal, psychological and cultural factors; and the convergent validity observed through the
Average Variance Extracted (AVE) test> 0.5 for the five constructs. The results show that the relations between consumer be-
havior and personal, social, psychological and cultural factors are significantly associated, which provides some guidelines to
understand consumer behavior and better meet needs in times of crisis.
Resumen
El confinamiento como una de las medidas decretadas en la emergencia sanitaria por el gobierno ecuatoriano para con-
trarrestar el impacto del virus SARS-CoV-2 o Covid-19, se ha visto reflejado en el comportamiento del consumidor. El
propósito de este estudio es conocer los efectos que esta medida emergente ocasiona en el consumo de las personas, uti-
lizando la medición de variables relacionadas con los factores personales, sociales, psicológicos y culturales. Se encuestó
una muestra de 658 consumidores en cinco ciudades del Ecuador: Cuenca, Guayaquil, Loja, Machala y Quito. Se utilizó
el Modelo de Ecuaciones Estructurales (SEM) para comprobar las hipótesis teóricas. Estas teorías fueron aceptadas
considerando tres dimensiones: las cargas de los indicadores analizadas a través del test Loadings >0.7; la confiabilidad
de consistencia interna medida a través del test de confiabilidad compuesta (CR) y Cronbach Alpha >0.7, para los cons-
tructos de comportamiento de compra, factores sociales, personales, psicológicos y culturales; y la validez convergente
observadas a través del test Average Variance Extracted (AVE) > 0.5 para los cinco constructos. Los resultados muestran
que las relaciones entre el comportamiento del consumidor y los factores personales, sociales, psicológicos y culturales
se encuentran asociadas significativamente, lo cual proporciona algunas pautas para entender el comportamiento del
consumidor y satisfacer mejor las necesidades en tiempo de crisis.
Received on: 01/07/2020 │ Revised on: 17/07/2020 │ Aprobado: 07/08/2020 │ Published on: 01/10/2020
228 Retos, 10(20), 2020
© 2020, Universidad Politécnica Salesiana del Ecuador
1. Introduction
Once the World Health Organization declared the current Covid-19 coronavirus as
a pandemic on 11 March 2020, countries have declared a state of emergency to prevent
transmission of this disease.
According to CEPAL study (2020), Covid-19 will cause serious economic and social
effects in the short and long term, the intensity and depth of which will depend on the
conditions of each economy, world trade, the duration of the epidemic and social and
economic measures to prevent contagion. Businesses in the commercial, education,
tourism, transportation, manufacturing and natural resources sectors will be affected
by the suspension of domestic productive activity, leading to unemployment and lower
economic growth; the economy in Latin America and the Caribbean is projected to fall
by -9.1% by 2020 due to Covid-19.
The Government of Ecuador, with 58 positive cases and 2 deaths, took six emerg-
ing measures on 16 March, 2020: (i) close public services except health, safety and
risk services, (ii) open hospitals, neighborhood stores, markets and supermarkets, (iii)
cancel public and private face-to-face working hours, (iv) implementation of curfew
for vehicles and individuals, (v) suspension of domestic passenger flights; and, vi) sus-
pension of interprovincial transportation. It is estimated that the country’s stagnation
will cost 3.5% of Gross Domestic Product (GDP) per month and estimated losses of $2
billion, according to Haro (2020).
Public and private organizations and consumers of products, services and activi-
ties will be the most affected by the public health problem caused by the SARS-Cov-2 or
Covid 19 virus, and it will be observed on reduced sales and changes in consumption,
posing great challenges to governments and productive sectors to emerge from the
economic stagnation generated by the state of emergency and emergency condition.
In this context, some studies offer some guidance for understanding consumption
in crisis. According to (Katz et al., 2020) they consider that Covid-19 pandemic has
brought challenges to the global socioeconomic system and emphasize the role of dig-
ital technologies used to counteract confinement, disseminate prophylactic measures
and facilitate the functioning of the economic system, social distancing and definitive
end of stagnation.
The study of (Zwanka & Buff, 2020) predicts that the impact of the pandemic will
bring changes in consumer behavior and point out that online shopping will be a prac-
tice during and after this public health problem.
In order to determine how the confinement measures caused by Covid-19 impact
consumer behavior through the measurement of variables related to personal, social,
psychological and cultural factors, it has been proposed to develop a model that
explains these relationships through four hypotheses; H1: There is a positive relation-
ship between social factors and consumer behavior; H2: There is a positive relationship
between psychological factors and consumer behavior; H3: There is a positive rela-
tionship between cultural factors and consumer behavior; and H4: There is a positive
relationship between personal factors and consumer behavior.
In order to achieve this purpose and to verify the proposed assumptions that
explain the effects of the consumer during confinement, four sections are developed.
The first presents some theoretical references on public health issues and factors that
influence consumer behavior in a global context and from the perspective of market-
ing; the second refers to the methodology, which includes the sample, measurements
of constructs and indicators and the method of analysis -Structural Equations Model
(SEM)-. The third presents the results by empirically examining the relationship
between consumer behavior and personal, social, psychological and cultural factors;
and finally, the discussion and conclusions of the study.
2. Theoretical framework
The effects of Covid-19 are altering the world’s economies. The pandemic has dis-
rupted tourism, global value chains and labor supply, affecting trade, investment and
total production in countries, leading to a widespread damage of the economy (Alonso,
2020).
Confinement, as one of the emerging measures taken by governments, has caused
that daily consumption of products, services and activities usually conducted by the
population have been modified. Knowing these effects and impacts is important
because they have faced social, psychological, technological and cultural changes,
which could impact new habits of behavior and consumption.
The analysis of consumer behavior is connected with sustainability and biodiver-
sity. A variety of studies analyze the relationships between the environment and the
consumption decisions of individuals (Weigel & Weigel, 1978; Berger & Corbin, 1992;
Bansal, 2003; Haytko & Matulich, 2010; Kotler, 2011).
Currently, consumers are aware that purchases affect the environment, making
changes in their purchasing behaviors and supporting companies in ecological strat-
egies. Dagher and Itani (2014) mention the perceived severity of environmental prob-
lems which motivate the ecological purchasing.
On the other hand, Paetz et al. (2012) argue that environmental degradation and
sustainability are one of the most serious problems facing the world today, followed by
the economy, health care, unemployment and crime.
Li and Atkinson (2020) examine another factor affecting consumer behavior, relat-
ed to the psychological factor named “consumer´s happiness”, measured through the
satisfaction of basic psychological needs; the results show that consumers feel happier
when they have more psychological ownership over a product after its consumption.
Likewise, the studies of (Chan & Mogilner, 2017; Caprariello & Reis, 2013; Carter &
Gilovich, suggest that basic psychological property increases happiness.
Other studies examine how lifestyle, personality and economics affect consumer
behavior. The empirical evidence of Muniady et al. (2014) applied to university students
in Malasya state “personality” as the main influencer in the purchase of the investigated
group.
To analyze consumer behavior, it is recognized in this study that not all consum-
ers are equal. Therefore, the differences in their lifestyle will be subjected to internal
factors such as perception, learning, emotions, motivations, needs and impulses; and
external factors such as culture, social strata, demographic aspects, reference groups or
coexistence that will determine the model to be developed in this research.
Abraham Maslow’s needs model and Veblen’s social psychological model will be
used to determine how the confinement measures caused by Covid-19 impact con-
sumer behavior, by measuring variables related to personal, social, psychological and
cultural factors and creating the consumer behavior model, which explains the relevant
elements in consumer behavior in times of crisis.
Maslow establishes the premise that a human being must first meet his/her basic
needs to subsequently seek to meet the most advanced needs —physiological, security,
belonging, esteem and self-realization (Maslow, 2013).
Incorporating the needs hierarchy into a public health problem framework means
that people have a priority focus on purchasing behavior, which means that the most
important needs must first be met than secondary needs.
Veblen’s social psychological model considers humans to be social animals adapt-
ed to the norms of their culture; their desires and behaviors are subjected to the groups
they belong to or those they would like to reach.
and Kim (2009) who point out that consumer changing value systems affect consumer
behavior and satisfaction through consumer value-mediating variables.
Participants were asked about the massive consumption of entertainment during
confinement as a use of streaming platforms for programs, movies, video games;
increased reading, cooking activities; and socialization of the family through commu-
nication and hobbies. These personal and emotional factors are related to the buying
behavior of brands analyzed by Xiao and Kim (2009).
Social relations and sustainability during confinement were measured through
nine questions. The first five related to online communication and social networks as
platforms to reconnect with family and work; while the four sustainable-related vari-
ables are measures through questions related to mobilization means, social causes,
water consumption and plastic reduction, premises worked by Dagher and Itani (2014),
who point out that the behavior of individual consumption affects the environment and
the need for consumers to participate in friendly behaviors and ecological strategies.
The psychological factor is measured through indicators related to exercise and
mental health, humor, and insurance purchase. Cao et al. (2020) investigate how a
discreet positive emotion impacts consumers’ choices about healthy versus unhealthy
choices. On the other hand, Li and Atkinson (2020) examine the effect of psychological
property on consumer happiness, measured through the satisfaction of basic psycho-
logical needs.
Finally, the culture perception factor was measured through indicators that
determine family customs and preference, as well as local consumption of products.
Rokeach (1968); Long and Schiffman (2000) point out that individuals’ personal, social
and cultural experiences explain the similarities and differences between individuals,
groups or cultures..
the fourth construct is related to the cultural perceptions; and finally the personal fac-
tors that include massive entertainment consumption variables (see Table 1).
4. Results
The results of the analysis carried out on the measurement and the structural
model, supported by the Smart PLS software are analysed below:
The demographic characteristics of respondents located in the five cities of
Ecuador: Cuenca, Guayaquil, Machala, Loja and Quito are described in Table 2.
Generation
Baby boomer (1952 - 1968) 93 14,2
X Generation (1969 - 1980) 102 15,6
Marital status
Single 332 50,7
Married 211 32,2
Divorced 35 5,3
Widow 3 0,5
In a Relationship 36 5,5
Separated 3 0,5
Free Union 35 5,3
Educational level
Elementary 13 2,0
High-school 122 18,6
Technology 33 5,0
University 397 60,6
Master degree 90 13,7
Cities
Cuenca 89 13,6
Guayaquil 125 19,1
Loja 182 27,8
Machala 72 11,0
Quito 187 28,5
the optimism indicator (FGopt_09=0.52) was eliminated for the psychological fac-
tor-related construct by presenting values lower than 0.6.
The appropriate scores for reliability tests and Cronbach’s Alpha are higher than
0.7, guaranteeing good reliability of the constructs. The convergent validity, measured
through the Average Variance Extracted (AVE) as shown in Table 3, is on the value 0.5
in all indicators, which provides validity to the model, considering what is established
by (Fornell & Larcker, 1981) and (Henseler et al., 2009).
Psychological factors
Customer Behavior
Personal factors
Cultural factors
Social factors
Constructs
Table 4 shows that in all cases the AVE is higher than the correlation values pre-
sented between the constructs, providing evidence of adequate discriminatory validity.
Model measurements provide good evidence on reliability and validity to represent the
topics discussed in this study. The structural model will then be evaluated.
Personal
factors
Social
factors
Behavior
Psychological
factors
Cultural
factors
FGsalu_03>0.62 indicators that do not justify their removal. This information confirms
the goodness of the indicators and the reliability of the instrument.
After evaluating the validity of the indicators, constructs and explanation of the
model through the adjusted R2, the analysis of the empirical evidence of the four
hypotheses raised (H1), (H2), (H3) and (H4) is performed. The results obtained for the
four hypotheses are statistically significant between purchasing behavior with social
factors (0.316, p <0:01), purchasing behavior and psychological factors (0.090, p<0:05),
purchasing behavior and cultural factors (0.215, p <0:01); and consumer behavior and
personal factors (0.1485, p <0:01) as shown in Table 5.
Cohen’s f2
Standard
p-value
t-value
Mean
value
error
Beta
Hypothesis
H1:Social factors -> Behavior compo 0.3163 0.3172 0.0455 6.9435 0.0000 0.1163
H2: Psychological factors -> Behavior compo 0.0904 0.0935 0.0374 2.4132 0.0159 0.0093
H3 Cultural fact ->Behavior compo 0.2156 0.2171 0.0413 5.2163 0.0000 0.0528
H4:Personal factors -> Behavior compo 0.1485 0.1500 0.0389 3.8162 0.0001 0.0266
5.1. Discussion
This study helps to understand the effects of Covid-19 on Ecuadorian consumer
behavior with respect to personal, social, psychological, cultural and personal factors,
for which the hypotheses raised and which have been statistically proven through the
Structural Equations Model (SEM) are discussed.
H1, H2, H3 and H4 hypotheses related to social, psychological, cultural and per-
sonal factors and consumer behavior are accepted, because the structural model shows
a significant relationship between variables, taking into account that the p value of
these relationships is below 0.05; it can be mentioned that there is significance between
these relationships, which concludes that there is a significant relationship between
changes in consumption habits and factors that influence consumer behavior during
Covid-19. These results are consistent with the findings of (Shigemura et al., 2020;
Torales et al., 2020; Wang et al., 2020;anxiety, depression, and stress during the initial
stage of the COVID-19 outbreak. The data will be used for future reference. Methods:
From 31 January to 2 February 2020, we conducted an online survey using snowball
sampling techniques. The online survey collected information on demographic data,
physical symptoms in the past 14 days, contact history with COVID-19, knowledge and
concerns about COVID-19, precautionary measures against COVID-19, and additional
5.2. Conclusions
This research allowed to design a Structural Equations Model (SEM) consisting of
five constructs and seventeen indicators; the model was statistically validated through
three dimensions: loads of indicators, reliability and convergent validity. The dimen-
sions show significant associated relationships between consumer behavior and social
relations and sustainability; habits in the mass consumption of entertainment; exercise
and mental health; family customs and preferences
The descriptive study on consumer behavioral factors, in terms of the social rela-
tion indicator, indicates that online communication and social networks have been
useful for reconnecting with the closest people and work; the use of video conferencing
applications (Zoom, Google Classroom and Microsoft Teams) for recreational, training
and professional activities have been essential for maintaining these relationships. On
the other hand, sustainability through support for local and/or national solidarity caus-
es and the reduction of plastics has influenced consumer behavior.
The massive consumption of entertainment in Ecuador includes a high use of
technology during confinement. Programs and movies have been watched on Netflix,
HBO, Amazon Prime, Hulu and Disney Plus; and the interest of streaming platforms
associated with video games and music has increased.
Analyzing psychological factors, exercise and humor have been the means chosen
to maintain the mood during confinement in Ecuador; meanwhile, food habits and
increased preferences in consumption of local products have changed.
From all of the above, some future lines of research may arise such as: the impacts
of technology and consumption in times of crisis; consumer behavior by generations—
Baby Boomers, Millennial, and Centennial—during Covid-19; purchasing behavior
and social responsibility of university students during confinement. In addition, there
are possibilities to extend the study in time and space; as well as conduct comparative
studies between Latin American countries to better understand this problem.
This research presented some limitations such as the response-time of consumers
to provide information online, which decreased the number of observations and terri-
torial scope. Therefore, it is recommended to expand this research at the national level
and to other emerging contexts.
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