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

No 26949, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D14 E21 G51 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-mac
Note: CF EFG PE
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Citations: View citations in EconPapers (435)

Published as Scott R Baker & Robert A Farrokhnia & Steffen Meyer & Michaela Pagel & Constantine Yannelis & Jeffrey Pontiff, 2020. "How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic," The Review of Asset Pricing Studies, vol 10(4), pages 834-862.

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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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