Abstract
The pervasive effects of the novel coronavirus (COVID-19) have put the world to test. Its effects permeate all facets of life including healthcare services and food supplies. However, most empirical studies failed to investigate its effects on the prices of food and healthcare services, which by all standards, are essential commodities. On this background, this study evaluates the impact of COVID-19 reported cases and lockdown stringency measures on the food and healthcare prices in the six (6) worst-affected countries. For empirical purposes, daily prices of food and healthcare services between 22nd January and 31st December 2020 were regressed against daily cases of COVID-19 and lockdown stringency measures within the dynamic autoregressive distributed lag procedure. Empirical evidences reveal that prices of healthcare and food are cointegrated with COVID-19 cases and lockdown measures in all the selected countries except Italy. Equally, healthcare and food prices reinforced itself in the long-run in the US, the UK and France. Furthermore, COVID-19 cases lead to significant increases in food and healthcare prices in the US, whereas, food and healthcare prices in France and UK declined significantly as COVID-19 cases mount. Conversely, food and healthcare prices declined significantly in the US and soar in France and the UK in reactions to COVID-19 new cases. Likewise, government stringency measures and containment health measures contributed significantly to healthcare and food price hike in the US and France respectively. Meanwhile, healthcare and food prices in the other selected countries remained unaffected even as the pandemic ravages. Following this empirical discoveries, relevant policy guidelines have been communicated.
Highlights
Beginning from late December 2019, the world has been battling with a common enemy known as corona virus (COVID-19)
In the light of this backdrop, the objective of the present study is to critically evaluate empirically, the effects of COVID-19 reported cases and lockdown stringency measures (Government Stringency Index and Containment and Health Index)2on food and healthcare prices in the six worst-affected countries
Following the Dynamic Autoregressive Distributed Lag (DARDL) pathway represented in Eq (4), we provide forthwith the dynamic association between COVID-19 and its induced stringency measures on food and healthcare prices
Summary
Beginning from late December 2019, the world has been battling with a common enemy known as corona virus (COVID-19). We envisaged that the restricted access to food items and health care services could further aggravate the mortality rate, thereby casting doubt on the ability of government to contain the spread This is so expected, as O'Hara and Toussaint (2021) highlighted that the inability of the populace to have unhindered access to the necessary food supplies and healthcare services arising from price instability mainly due to restrictions in movements could make them more vulnerable to the attack of the virus. To this end, it is expected that the findings of the current study will draw government's attention to the potential effects of COVID-19 cases and its induced lockdown stringency measures on the prices of food and healthcare services. The empirical analysis and discussions of findings are outlined in part, while the study is summarized with some policy recommendations in part-5
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