2.1. Rational Expectations Theory (RET)
There are various theories used in explaining consumer behaviors. The theory of reasoned action (TRA), theory of planned behavior (TPB) and rational expectations theory (RET) are among these theories. Rational expectations theory (RET) was proposed by Muth (1961). For Muth (1961) [
1], while making a conscious estimation for the future, economic decision makers can rationally review and interpret the variables that may affect their decisions by using all the information that is available in the market. According to RET, economic decision makers can make wrong estimations, but as long as rational expectations are valid, these mistakes are not systematic [
1] (pp. 316–317). According to Hoover and Young (2011) [
2], rational expectations theory is totally integrated with macro-economy, and as Muth (1961) [
1] stated, “as rational expectations are conscious estimations, they are basically the same as the estimations of the relevant economic theory.” There are significant studies in the literature on Muth’s rational expectations theory [
3,
4,
5].
In a macro-economic sense, total demand is the sum of consumer preferences. Consumer preferences, on the other hand, can be considered mostly as the reflection of consumer expectations. In this context, consumer expectations are transformed into preferences, and preferences are transformed into demand. Based on this, in order to understand the change in demand, expectations should firstly be understood. Choosing RET as the theoretical background in the study is meaningful in this sense. This is because according to RET, consumer expectations being positive or negative affects preferences linearly and in the same direction. In this context, one of the problems of the study is to what extent consumers residing in Turkey can interpret the variables regarding the normalization process (economic conditions, income, expenditures, etc.) for the foreseeable future (6 months), with the information that is available to them. In the study, based on the responses that were given by the consumers in relation to the direction of the change in the pandemic process, it was attempted to determine whether they were optimistic or pessimistic; thus, the study aimed to identify the direction of their preferences in the post-pandemic process.
2.2. Consumer Sentiment
Behavioral economics examines individuals’ economic behaviors by including psychological factors such as their motives, attitudes, and expectations in the analysis, along with expenditures, savings, investment, and price determining processes [
6]. In other words, psychological factors such as motives, attitudes, and expectations condition individuals’ reactions to stimulants. Accordingly, in addition to the objective economic variables such as income, tax, and prices, subjective attitudes such as individuals’ expectations of future income and employment security, perceived effect of economic conditions, and willingness to buy that emerge as a result of these, are also included in the factors that are effective in their spending behaviors [
7] (p. 228). The statistical measure that expresses these subjective factors is named as consumer sentiment.
With studies on consumer sentiment beginning to be conducted by George Katona et al. in the 1950s, the Michigan University Index of Consumer Sentiment was created. The findings that were obtained through this index for more than 45 years served to enable the creation of a consumer sentiment formation within the behavioral economics discipline [
7,
8]. By using this index in their study, Katona and Harris [
6] monitored consumer sentiment through surveys that were applied in 3-month intervals between 1954 and 1977. As a result of the study, it was determined that changes in consumer intentions occurred before behaviors. In addition, it was found that while an earlier and apparent decrease occurred in consumer intentions in economic stagnation periods, in periods of economic revival, an increase was observed in consumer intentions in a shorter period [
6] (p. 1). With this study, Katona and Harris [
6] demonstrated that consumer behaviors and their reflection on the economy can be estimated, albeit in an early or late period. Therefore, with the measurements made through the Index of Consumer Sentiment (ICS), consumer behaviors can be estimated.
The measurement of consumer sentiment is based on three basic structures. These are personal finance, the general economic condition of the country and perceived current condition related to purchasing conditions, and future expectations [
3,
9]. The certainty or uncertainty of consumers’ expectations of future conditions is expressed in a dimension ranging between “confidence and optimism” and “uncertainty and pessimism” [
10] (p. 5). In studies that were conducted monthly by the Survey Research Center—University of Michigan starting from 1978, based on the assumption that optimistic consumers would continue their behaviors that would keep the economy alive, and that pessimistic ones would exhibit behaviors to the contrary, it was aimed to determine consumers’ intentions and expectations and thus to estimate the course of the American economy [
11] (p. 2–3).
Consumer sentiment studies have been conducted in more than 45 countries, most of which are developed and emerging economies, as of 2007 [
10]. In this context, many studies that are conducted in the literature [
12,
13,
14,
15,
16,
17,
18,
19,
20,
21] support the idea that the Index of Consumer Sentiment (ICS) is an effective estimation tool for future economic indicators. When considering that the studies that used the index covered a long time series, it is thought that the crises and ruptures that were observed in the period in question increase the measurement reliability of the index. It is expected that the ICS, which was effectively used in periods that embodied many crises and ruptures, will also yield noteworthy results in the pandemic period.
2.3. Consumer Sentiment during COVID-19
In their study, Carroll, Fuhrer, and Wilcox (1994) [
13] reported that consumer sentiment was directly associated with the changes in their expenditures, and that consumers’ expectations affected their expenditures. In the study, it was stated that sentiment was an independent driving factor in economy, and that the changes in this sentiment not only estimated the changes in expenditures, but it also led to these changes. Moreover, it was revealed that consumer sentiment actually estimated future changes in the household expenditures. Moreover, it was concluded in the study that consumer sentiment had a low explanatory feature in terms of the current changes in the household expenditures.
In the study that was conducted by Kellstedt, Linn, and Hannah (2015) [
22], it was revealed that Michigan University’s Index of Consumer Sentiment (ICS) was a reliable indicator of consumer trust. On the other hand, Gillitzer and Prasad’s study (2018) [
23] reported evidence that consumer sentiment had a causal effect on consumption.
In the study that was conducted by Nicola et al. (2020) [
24], sectors such as education; finance; industry; the healthcare and pharmaceutical industry; hospitality; tourism and aviation; real estate and housing; the sports industry; information technology; media; research and development; and food, in which consumer sentiment could be significantly affected by the COVID-19 pandemic, were examined. These sectors are considered as being open to reshaping and long-term transformations, along with the COVID-19 pandemic.
In the study that they conducted with the participation of more than 10,000 people in the USA, Coibion, Gorodnichenko, and Weber (2020) [
25] analyzed how local quarantines due to COVID-19 affected household expenditures, and their macro-economic expectations at the local level in different time periods. According to the study findings, the total consumer spending showed the highest decrease in the travel and clothing sectors. Regarding consumer expectations, it was determined that unemployment would continue to increase in the coming 12 months, and that a higher unemployment would occur in an interval of three to five years.
In the study that was conducted by Akhtar, Akhtar, and Usman (2020) [
26], it was found that the threat that was posed by the COVID-19 pandemic restricted the shopping freedom of the consumers, but that trust in the government shaped their beliefs regarding resistance to the threat against satisfaction and freedom.
In the study that was conducted by Van der Wielen and Barrios (2021) [
27], it was revealed that in the period following the coronavirus pandemic, individuals’ concerns about unemployment reached much higher levels than the level of concern that was seen in the Great Repression. In addition, a significant slowdown in labor markets and consumption was observed. It was also determined that in the EU countries that were economically affected the most, the change that occurred in consumer sentiment substantially increased. In this context, it was pointed out that unprecedented financial policy actions, such as short-time working plans that were implemented or reformed at the beginning of the COVID-19 crisis, did not alleviate economic sentiment.
In the study in which they analyzed the changes in consumer behaviors that were generated by the COVID-19 pandemic period, Stanciu et al. (2020) [
28] determined that individuals displayed behaviors that aimed to meet their basic needs. Fanelli (2021) [
29] revealed that there was a shift towards an increased frequency in food purchases along with the pandemic, and that consumers reduced their consumption of ready-made foods. In a study that was conducted by Baker et al. (2020) [
30], it was observed that in the first half of March 2020 (just before the declaration of the emergency situation), individuals increased their expenditures by over 40% in various categories, and that in the second half of March 2020, with the spread of the infection, they reduced their general expenditures by 25–30%.
In the study that was conducted by Dou et al. (2020) [
31], in which a questionnaire was applied to participants in China and the USA, it was found that the COVID-19 pandemic restrictions affected purchasing behaviors, and that the participants from both countries tended to spend their income more on healthy food.
The results of the study that was conducted in 45 countries on consumer sentiment by Arora et al. (2020) [
32] demonstrated that Chinese, American, and Indian consumers were optimistic about economic recovery, while Korean, Japanese, and European consumers were pessimistic. The Chinese participants of the study believed that they would return to normal in 2–3 months, but that their financial status would continue to be negatively affected, while the majority of other participants other than the Chinese thought that the return to the normal would take more than 4 months. An overwhelming majority of the Indian and Korean consumers stated that they were more careful about where they spent their money by making discount and brand search. It was observed that consumption in many product categories continued to decrease in South Africa, and while there was an increase in the consumption of some product categories in Asian countries such as India, Korea, and China, consumption expenditures continued to concentrate on basic needs.
In the study that was conducted by Granskog, Lee, and Magnus (2020) [
33], it was determined that 88% of the consumers expected a slow recovery or stagnation, and that general consumer confidence was low. More than 60% of the consumers reported that they spent less on clothing (clothes, shoes, accessories, jewelry, etc.) in the crisis period, while approximately half of them thought that this trend would continue after the crisis as well.
According to the results of the study that was conducted by Ho, Kim, and Yamaka (2020) [
34] in different countries, most consumers expected that their routines and household economies would be affected in 2 to 6 months in the future. As an exception, a considerable number of participants in Japan expected this effect to continue for more than 7 months. The consumers in the studied countries expected that their income and savings would decrease, regardless of economic recovery expectations. In a study that was conducted in Indonesia by Potia and Dahiya (2020) [
35], it was determined that 49% of the participants expected the economy to recover in 2–3 months, and that they had optimistic expectations that the economy would grow at a rate that was similar to the pre-COVID-19 period, or faster. In addition, half of the participants expected that the crisis would negatively affect their ability to make their living.
In the study that was conducted by McKinsey (2020) [
36], titled “Survey: Turkish Consumer Sentiment During the Coronavirus Crisis”, it was revealed that income levels of consumers in Turkey and their household expenditures were significantly affected by the COVID-19 crisis. It was found in the study that the majority of the consumers were worried about personal health, economy, and the duration of the crisis. Both the observed effects and uncertainty regarding the situation manifested themselves as a decrease in expenditures in many categories. The increase in basic household needs and online expenditures that were made for entertainment purposes were expected to increase, at least in the short-term. Furthermore, according to the results of the study, half of the participants were pessimistic about the future. The ratio of those who reduced their expenditures was found to be 56%, while the ratio of those who were quite careful about their expenditures was determined as 58%. A total of 47% of the participants expressed that the uncertainty regarding the economy prevented the purchasing and investment behaviors that they would otherwise exhibit. While 36% of the participants stated that their businesses were negatively affected, the ratio of those who expressed neither positive nor negative opinions was 47%. The ratio of those who stated that their financial ability to make their living was negatively affected by COVID-19 was 32%, while the ratio of those who were neutral on this issue was 56%. The ratio of the participants who expected a decrease in the household income level in the coming two weeks was found to be 69%; the ratio of those who expected a decrease in the household expenditures was 45%; and the ratio of those who anticipated a decrease in the household savings was 48%. A substantial majority of the participants believed that the personal and financial effects of the COVID-19 pandemic would persist for more than 2 months.
In the study that was conducted by Borsellino, Kaliji, and Schimmenti (2020) [
37], sustainable production models were discussed, and by considering sentiment towards COVID-19 and potential pandemics, ensuring food security, environmental sustainability, and economic development was evaluated to be an important structure.
In the study in which they investigated the effects of the COVID-19 pandemic and the global preventive measures taken on growth expectations, Gormsen and Koijen (2020) [
38] determined that GNP growth expectations in the USA and the EU did not react to the restrictions in Wuhan, but that as a result of the restrictions in Italy and especially the ensuing travel restrictions, GNP growth expectations for the following year decreased both in the USA and the EU. In this context, an expectation that the current crisis would be short, along with the pandemic, was also revealed.
In the study that was conducted by Potia and Dahiya (2020) [
35], it was determined that 49% of the participants had optimistic expectations that the Indonesian economy would recover within 2–3 months, and that it would grow at a similar to or faster rate than the pre-pandemic period. As a result of the study, it was revealed that a great majority of the participants believed that the crisis would have a negative impact on their making a living, that this situation would cause them to consume their savings, and that they felt insecure about their jobs.
In the study in which they examined the effect of COVID-19 on consumer satisfaction and perceptions, Brandtner et al. (2021) [
39] concluded that there was a general and significant decrease in consumer satisfaction due to the pandemic. In addition, they found that political regulations had a profound effect on consumer satisfaction.
In their study, Degli Esposti, Mortara, and Roberti (2021) [
40] aimed to understand the tendency towards sustainable products (clothing, books, television platforms, shared devices, eating–drinking) in the COVID-19 pandemic period, and to analyze whether the COVID-19 pandemic changed this tendency. The findings that were obtained showed that consumers’ frequency of purchasing certain products such as books and TV series increased, while their frequency of purchasing other products such as care and clothing products decreased.
Hesham, Riadh, and Sinem (2021) [
41] investigated how behavioral changes interacted with purchasing decisions in the COVID-19 pandemic period, how they affected purchasing decisions, and how food purchasing behaviors were affected. It was determined that women were more worried about the COVID-19 pandemic and took more precautions against infection. In addition, purchasing experiences and purchasing intention increased more in foods in comparison to other products.
Skalkos et al. (2021) [
42] tested consumers’ confidence in traditional foods in the new economic conjuncture that emerged along with the COVID-19 pandemic. The results that were obtained showed that confidence would be the main preference factor in consumers’ purchasing goods and services in the new normal. In the study that was conducted by Teresiene et al. (2021) [
43], it was found that the spread of the COVID-19 pandemic did not affect consumer confidence in the Eurozone, and that it negatively affected consumer confidence in the USA and China. On the other hand, in the study that was conducted by Jin, Bao, and Tang (2021) [
44], it was demonstrated that the consumer confidence level reached within the scope of the positive opinions of the participants, regarding the Chinese economy being at a level that could support the recovery of the Chinese tourism sector.
This study differs from the literature, mainly in terms of measuring the consumer sentiments of consumers in Turkey. In addition, unlike McKinsey’s Turkey research, this research was developed by constructing it on a scientific theory and concluded with managerial implications. Finally, it differs from the aforementioned research in terms of the time of the research (McKinsey’s last Turkey study is dated April 2020) and the sample size (McKinsey’s research was carried out with 600 participants).
In light of the findings that were obtained in the literature, the answers to three basic questions were sought in the present study:
RQ1: How do consumers in Turkey think economic conditions, their current income level, and their general expenditures will change along with the normalization process?
RQ2: What are the expectations about the change in consumer sentiment in the 6-month period following the normalization process in Turkey?
RQ3: Is there a relation between the expectation of change in consumer sentiment and demographic characteristics (age, gender, education, and income) in the 6-month period following the normalization process in Turkey?