Research / BFI Working PaperMar 31, 2020

How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic

Scott R. Baker, R.A. Farrokhnia, Steffen Meyer, Michaela Pagel, Constantine Yannelis

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.

More Research From These Scholars

BFI Working Paper Feb 13, 2021

Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes

Atul Gupta, Sabrina T. Howell, Constantine Yannelis, Abhinav Gupta
Topics:  Health care, Financial Markets
BFI Working Paper Aug 23, 2021

Competition and Selection in Credit Markets

Constantine Yannelis, Anthony Lee Zhang
Topics:  Financial Markets
BFI Working Paper May 8, 2023

Debt Moratoria: Evidence from Student Loan Forbearance

Michael Dinerstein, Constantine Yannelis, Ching-Tse Chen
Topics:  Fiscal Studies, Higher Education & Workforce Training