Least-Square Models with Structural Breaks for Price-Demand Relationship of Prevention-Commodities to Covid-19 Disease: Evidence from Pooled Weekly Data of Hand Sanitizers, Face-Masks and Vitamin-C Supplements

Abstract

The present study employs log-log models and comparatively estimates the price-demand relationship of hand sanitizers, face-masks and vitamin-c supplements as COVID-19 prevention-commodities both before and after the exponential spread of the current pandemic. A novel weekly data is collected and generated by a two-stage stratified sampling technique in a field survey from five capital and most populous cities of Pakistan. The least-square methods with structural breaks are employed for city-wise assessment, while fully modified ordinary least square methods are employed for the pooled panel of Pakistan. The structural breaks are assessed using a priori information via graphical analysis as well as employing the global information criterion of structural breaks. The findings suggest demands and prices structurally surged exponentially after the spread of COVID-19 disease in Pakistan. Thus, implying; i) immediate policy check to stabilize the prices of COVID- 19 prevention-commodities for the poor and lower-income groups of people and ii) importing the commodities to fill the existing demand-supply gap to mitigate the spread of the current pandemic as per the World Health Organization benchmark for public prepared-ness to combat COVID-19 disease.