How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic

Scott Baker, R.A. Farrokhnia (), Steffen Meyer (), Michaela Pagel () and Constantine Yannelis
Additional contact information
R.A. Farrokhnia: Columbia Business School, Columbia Engineering School
Steffen Meyer: University of Southern Denmark and Danish Finance Institute
Michaela Pagel: Columbia Business School, NBER, and CPER

No 2020-30, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We explore how household consumption responds to epidemics, utilizing transaction-level household financial data to investigate the impact of the COVID-19 virus. As the number of cases grew, households began to radically alter their typical spending across a number of major categories. Initially spending increased sharply, particularly in retail, credit card spending and food items. This was followed by a sharp decrease in overall spending. Households responded most strongly in states with shelter-in-place orders in place by March 29th. We explore heterogeneity across partisan affiliation, demographics and income. Greater levels of social distancing are associated with drops in spending, particularly in restaurants and retail.

Keywords: Consumption; Coronavirus; COVID-19; Household Finance; Transaction Data (search for similar items in EconPapers)
JEL-codes: D14 E21 G51 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2020
New Economics Papers: this item is included in nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (463)

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https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_202030.pdf (application/pdf)

Related works:
Working Paper: How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic (2020)
Journal Article: How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic
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