The covid-19 instruments’ effectiveness in mitigating the pandemic impact on Spanish consumption

Antonio Cutanda and Juan A. Sanchis
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Antonio Cutanda: Universidad de Valencia, Valencia, Spain
Juan A. Sanchis: Universidad de Valencia and ERICES, Valencia, Spain

No 2501, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: In this study, we evaluate how the COVID-19 pandemic affected households’ non-durable spending in 2020. To this end we compare actual individual effective spending with predictions derived from an estimated consumption function, using data from the Spanish SHF panel. Our findings show that the pandemic effect was significantly smaller in individuals than in aggregate NA data, particularly for income measures. Moreover, the estimated reduction in non-durable consumption is positively related to wealth but negatively related to household income. Additionally, we regress each individual estimated decline in non-durable spending on a broad set of indicators for different economic policy measures against the COVID-19. The results indicate that these kinds of interventions were unable to significantly support non-durable expenditure, which may account for the rise in savings during the pandemic.

Keywords: Consumer Spending; Panel data; COVID-19; Fiscal Policy (search for similar items in EconPapers)
JEL-codes: C23 D12 E21 E65 H31 (search for similar items in EconPapers)
Date: 2025-01
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