Abstract
Utilizing transaction-level financial data, we explore how household consumption responded to the onset of the COVID-19 pandemic. As case numbers grew and cities and states enacted shelter-in-place orders, Americans began to radically alter their typical spending across a number of major categories. In the first half of March 2020, individuals increased total spending by over 40% across a wide range of categories. This was followed by a decrease in overall spending of 25%-30% during the second half of March coinciding with the disease spreading, with only food delivery and grocery spending as major exceptions to the decline. Spending responded most strongly in states with active shelter-in-place orders, though individuals in all states had sizable responses. We find few differences across individuals with differing political beliefs, but households with children or low levels of liquidity saw the largest declines in spending during the latter part of March.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 834-862 |
| Number of pages | 29 |
| Journal | Review of Asset Pricing Studies |
| Volume | 10 |
| Issue number | 4 |
| DOIs | |
| State | Published - Dec 1 2020 |
Funding
Wethank Sylvain Catherine, CarolineHoxby,Ralph Koijen, Jonathan Parker,Amir Sufi, Pietro Veronesi,Rob Vishny, and Neil Ning Yu for helpful discussions and comments. We are grateful to Suwen Ge, Sypros Kypraios, Sharada Sridhar, George Voulgaris, and Jun Xu for excellent research assistance and SaverLife for providing data. C. Yannelis is grateful to the Fama Miller Center for generous financial support. R. A. Farrokhnia is grateful to Advanced Projects and Applied Research in Fintech at Columbia Business School for support.
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
