Fear of COVID-19 Contagion and Consumption: Evidence from a Survey of Italian Households

Giovanni Immordino, Tullio Jappelli (), Tommaso Oliviero and Alberto Zazzaro ()

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Using data from a new survey of 3,000 Italian households collected at the end of October 2020, we study the effect of fear of COVID-19 contagion and income risk on consumption. The survey elicits individual-level indicators of fear of contagion, distinguishing between worries while working, shopping, traveling, eating out and meeting relatives or friends, and indicators of changes in spending behavior after the pandemics. The probabilities of consumption drops and increased saving are positively associated to fear of contagion, particularly while shopping, traveling and eating out. Income uncertainty, measured by the probability of job loss, also contributes to explain the increase in saving and the drop in consumption. Our findings suggest that fear of contagion and income uncertainty limits the effectiveness of policies aimed at stimulating consumption during the pandemic.

Keywords: COVID-19; Consumption; Precautionary Saving; Fear of Contagion. (search for similar items in EconPapers)
JEL-codes: D14 D15 (search for similar items in EconPapers)
Date: 2021-01-29
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (5)

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Journal Article: Fear of COVID‐19 contagion and consumption: Evidence from a survey of Italian households (2022)
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