Arbeitspapier
The Covid-19 crisis and consumption: Survey evidence from six EU countries
Using new panel data from a representative survey of households in the six largest euro area economies, the paper estimates the impact of the Covid-19 crisis on consumption. The panel provides, each month, household-specific indicators of the concern about finances due to Covid-19 from the first peak of the pandemic until October 2020. The results show that this concern causes a significant reduction in nondurable consumption. The paper also explores the potential impact on consumption of government interventions and of another wave of Covid-19, using household-level consumption adjustments to scenarios that involve positive and negative income shocks. Fears of the financial consequences of the pandemic induce a significant reduction in the marginal propensity to consume, an effect consistent with models of precautionary saving and liquidity constraints. The results are robust to endogeneity concerns through use of panel fixed effects and partial identification methods, which account also for time-varying unobservable variables, and provide informative identification regions of the average treatment effect of the concern for Covid-19 under weak assumptions.
- ISBN
-
978-92-899-4453-3
- Language
-
Englisch
- Bibliographic citation
-
Series: ECB Working Paper ; No. 2507
- Classification
-
Wirtschaft
Consumer Economics: Empirical Analysis
Criteria for Decision-Making under Risk and Uncertainty
Macroeconomics: Consumption; Saving; Wealth
Fiscal Policies and Behavior of Economic Agents: Household
- Subject
-
Covid-19
Consumption
Marginal Propensity to Consume
Financial concerns
Fiscalpolicies
- Event
-
Geistige Schöpfung
- (who)
-
Christelis, Dimitris
Georgarakos, Dimitris
Jappelli, Tullio
Kenny, Geoff
- Event
-
Veröffentlichung
- (who)
-
European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2020
- DOI
-
doi:10.2866/453216
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Christelis, Dimitris
- Georgarakos, Dimitris
- Jappelli, Tullio
- Kenny, Geoff
- European Central Bank (ECB)
Time of origin
- 2020
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