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Household Behavior (Consumption, Credit, and Investments) During the COVID-19 Pandemic

Author

Listed:
  • Constantine Yannelis

    (Booth School of Business, University of Chicago, Chicago, Illinois, USA)

  • Livia Amato

    (Booth School of Business, University of Chicago, Chicago, Illinois, USA)

Abstract

The 2020 COVID-19 pandemic led to a large number of studies in household finance, using new high-frequency data in close to real time. In this article, we survey household behavior during the pandemic, with a focus on consumption, government policies, credit, and investment. The pandemic induced a rapid decline in consumption, which was affected by but largely preceded stay-at-home orders and was followed by a rapid rebound. Government stimulus was less effective in 2020 relative to other recessions, which is consistent with both shutdowns and precautionary savings. Delinquency rates fell, unlike in other recessions, likely due to government debt relief policies. Household investment behavior was affected by pandemic-induced changes in beliefs. We conclude by discussing avenues for future research.

Suggested Citation

  • Constantine Yannelis & Livia Amato, 2023. "Household Behavior (Consumption, Credit, and Investments) During the COVID-19 Pandemic," Annual Review of Financial Economics, Annual Reviews, vol. 15(1), pages 91-113, November.
    • Handle: RePEc:anr:refeco:v:15:y:2023:p:91-113
    DOI: 10.1146/annurev-financial-110821-020744
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    File URL: https://doi.org/10.1146/annurev-financial-110821-020744
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    Cited by:

    1. Bonaccorsi, Giovanni & Scotti, Francesco & Pierri, Francesco & Flori, Andrea & Pammolli, Fabio, 2024. "Targeted policies and household consumption dynamics: Evidence from high-frequency transaction data," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 111-134.

    More about this item

    Keywords

    household finance; COVID-19; consumption; stimulus;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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