COVID-19, Containment and Consumption

Tatjana Dahlhaus, Daniel Hyun, Antoine Poulin-Moore, Jaime Trujillo, Saarah Sheikh and Benjamin Straus

No 2022-5, Discussion Papers from Bank of Canada

Abstract: We assess the impact of the COVID-19 pandemic on consumption indicators by estimating the effects of government-mandated containment measures and of the willingness of individuals to voluntarily physically distance to prevent contagion. To do this, we use weekly panel regressions across Canadian provinces to study how differences in both containment measures and voluntary physical distancing affect consumption, proxied by transaction data. We also conduct a similar panel analysis across 28 advanced economies using retail mobility data as a proxy for in-person consumption of goods and services. Two main findings are broadly robust across a variety of tests and specifications. First, indicators of both government containment measures and voluntary physical distancing are negatively correlated with consumption indicators, with the latter relationship showing variation over time. Second, contact-intensive and other highly restricted sectors in Canada were generally more affected by increases in the stringency of government containment measures and voluntary physical distancing. In contrast, the impact from voluntary physical distancing on spending categories deemed essential by some Canadian provincial governments was muted relative to the impact on other categories.

Keywords: Coronavirus disease (COVID-19); Domestic demand and components (search for similar items in EconPapers)
JEL-codes: C23 D12 E65 I18 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022-03
New Economics Papers: this item is included in nep-mac
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