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Inequality of subjective economic uncertainty and individual economic prospects in the pandemic period

Montserrat Guillen (), Miguel Santolino () and Xenxo Vidal-Llana ()
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Montserrat Guillen: Riskcenter-IREA, Universitat de Barcelona.
Miguel Santolino: Riskcenter-IREA, Universitat de Barcelona.
Xenxo Vidal-Llana: Riskcenter-IREA, Universitat de Barcelona.

No 202202, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: During a pandemic period, uncertainty about the evolution of the economy is expected to increase, conditioning the economic decisions of individuals. This article studies which factors influence the appearance of subjective economic uncertainty and what are the economic expectations of individuals. The impact of the pandemic on the household economy and the subjective uncertainty that individuals express about the future economic situation of their households are analyzed based on a set of socioeconomic factors that cannot be considered in macroeconomic studies on uncertainty. We use data from a survey conducted in October 2021 taking a representative sample of the population residing in Catalonia (Spain) with a total of 1,604 people interviewed. The results suggest that, when controlling for all other factors, individuals in households with greater saving capacity are those who express less uncertainty regarding their future economic situation and women show greater future uncertainty than men. This study finds evidence that there is an association between the age of the interviewees and economic expectations, with older people being the most pessimistic. However, it is concluded that age is not associated with a greater presence of subjective uncertainty, which means that there has not been a deterioration of confidence beyond retirement.

Keywords: Economic behavior; Expectations; Survey; Savings; Lockdown; Pandemic; Inequality. JEL classification: C83; D14; D31; G41. (search for similar items in EconPapers)
Pages: 27 pages
Date: 2022-02, Revised 2022-02
New Economics Papers: this item is included in nep-cwa
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Handle: RePEc:ira:wpaper:202202