Exposure to the COVID-19 Stock Market Crash and Its Effect on Household Expectations

Tobin Hanspal, Annika Weber and Johannes Wohlfart
Additional contact information
Tobin Hanspal: WU Vienna University of Economics and Business
Annika Weber: Goethe University Frankfurt and Leibniz Institute for Financial Research SAFE
Johannes Wohlfart: University of Copenhagen, CESifo, and Danish Finance Institute

The Review of Economics and Statistics, 2021, vol. 103, issue 5, 994-1010

Abstract: We survey a representative sample of U.S. households to study how exposure to the COVID-19 stock market crash affects expectations and planned behavior. Wealth shocks are associated with upward adjustments of expectations about retirement age, desired working hours, and household debt but have only small effects on expected spending. We provide correlational and experimental evidence that beliefs about the duration of the stock market recovery shape households' expectations about their own wealth and their planned investment decisions and labor market activity. Our findings shed light on the implications of household exposure to stock market crashes for expectation formation.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
https://doi.org/10.1162/rest_a_01011
Access to PDF is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:restat:v:103:y:2021:i:5:p:994-1010

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().