Impact of Consumer Awareness and Behavior on Business Exit in Hospitality, Tourism, Entertainment, and Culture Industries Under the Covid-19 Pandemic

COVID-19 has a negative impact on business performance through anti-contagion regulations and consumers’ self-restraints. It is especially serious in specific service industries such as hospitality, tourism, entertainment, and cultural industries. Empirical studies have been carried out on the effects of COVID-19 and related policies on business performance, but most of them rely on one-shot survey data on firms. Moreover, they neither consider consumer awareness, nor target specific service sectors that are directly damaged by anti-contagion regulations. Therefore, this study uses our original monthly survey data on consumers and telephone directory monthly data to investigate empirically the effects of consumer awareness and attitudes on business exits at the prefecture-industry level, focusing on specific service sectors including hospitality, tourism, entertainment, and cultural industries. Based on panel fixed-effect estimation, our results show that an increase in consumers’ risk aversion, sympathy for self-restraint from going out, and a decrease in going out with family members significantly increases the exit ratio in specific service industries in the same prefecture. Moreover, these effects vary depending on consumer types such as gender, age, income levels and household structure