Household Behavior (Consumption, Credit, and Investments) During the COVID-19 Pandemic

Constantine Yannelis and Livia Amato
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Livia Amato: Booth School of Business, University of Chicago, Chicago, Illinois, USA

Annual Review of Financial Economics, 2023, vol. 15, issue 1, 91-113

Abstract: The 2020 COVID-19 pandemic led to a large number of studies in household finance, using new high-frequency data in close to real time. In this article, we survey household behavior during the pandemic, with a focus on consumption, government policies, credit, and investment. The pandemic induced a rapid decline in consumption, which was affected by but largely preceded stay-at-home orders and was followed by a rapid rebound. Government stimulus was less effective in 2020 relative to other recessions, which is consistent with both shutdowns and precautionary savings. Delinquency rates fell, unlike in other recessions, likely due to government debt relief policies. Household investment behavior was affected by pandemic-induced changes in beliefs. We conclude by discussing avenues for future research.

Keywords: household finance; COVID-19; consumption; stimulus (search for similar items in EconPapers)
JEL-codes: D12 E21 G51 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1146/annurev-financial-110821-020744

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