In the third quarter of last year, spending 4.29 trillion won, the impact of recession and collective fatigue
Entertainment and sports consumption was minimal in 8 years, and many facilities were closed.
When the economy is down, consumption of most items declines. However, there are also items that increase consumption by toxic. It is alcohol and tobacco.
Mainstream economics explains the rising consumption of alcohol and cigarettes as inferior goods during recession. Unlike normal goods, where consumption increases when income increases and consumption decreases when income decreases, inferior goods consumption decreases when income increases, and consumption increases when income decreases.
If alcohol and cigarettes that harm health are considered inferior goods, consumption will increase during the recession. In particular, in the case of last year, when the new coronavirus infection (Corona 19) spread, domestic consumers’ spending on alcohol and tobacco increased the largest ever.
As the spread of Corona 19 increased collective fatigue and strengthened social distancing, alcohol and tobacco consumption increased.
According to the Bank of Korea on the 5th, out of the final consumption expenditure by household purpose in the third quarter of last year, alcohol and tobacco expenditures were KRW 4.29 trillion. This is the largest amount since the Bank of Korea published related statistics in 1970.
Earlier, in the first quarter of last year, the sector’s expenditure amounted to 4.15 trillion won, which was the third time in history, following 4.29 trillion won in the fourth quarter of 2017 and 4.15 trillion won in the first quarter of 2016.
In the second quarter of last year, alcohol and tobacco expenditures also reached 4.17 trillion won, close to the record for the fourth quarter of 2017, and in the third quarter, they set a new record altogether. In the third quarter of last year, the increase in alcohol and tobacco spending compared to a year ago was 6.2%, the highest in four years after 6.5% in the second quarter of 2016.
In the first quarter of 1997, when the shadow of the International Monetary Fund (IMF) foreign exchange crisis was casted, 1,689 trillion won was spent on alcohol and cigarettes, a 20.0% increase from the previous year. In the second quarter of that year, it spent 1,693 trillion won, an increase of 18.6% compared to the previous year.
According to a survey of household trends by the National Statistical Office, among the average monthly household expenditure of households nationwide (two or more) in the third quarter of last year, alcohol and tobacco consumption expenditure was 42,980 won, the highest since the statistics were prepared in 2003. Both alcoholic beverage (19,651 won) and tobacco (23,329 won) consumption expenditures recorded the highest since the statistics were written.
The aftermath of Corona 19 also affected leisure culture. In the third quarter of last year, consumption expenditure in the entertainment, sports and culture sector was 12,396 trillion won, the lowest since the third quarter of 2012 at 12,3298 billion won.
In particular, this is a decrease of 24.1% compared to the third quarter of 2019. This rate of decline is the largest ever. As social distancing was strengthened, there were many concert halls and sports facilities that were closed.
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