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Pandemic Consumption

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  • Bachmann, Rüdiger
  • Bayer, Christian
  • Kornejew, Martin

Abstract

This paper examines how households adjusted their consumption behavior in response to the COVID-19 infection risk during the early phase of the pandemic and without consumption lockdowns. We use a monthly consumption survey specifically designed by the German Statistical Office, covering the second wave of COVID-19 infections from September to November 2020. Households reduced their consumption expenditures on durable goods and social activities by 24 percent and 36 percent, respectively, in response to one hundred additional infections per one hundred thousand inhabitants per week. The effect was concentrated among the elderly, whose mortality risk from COVID-19 infection was arguably the highest.

Suggested Citation

  • Bachmann, Rüdiger & Bayer, Christian & Kornejew, Martin, 2023. "Pandemic Consumption," CEPR Discussion Papers 18120, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18120
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    1. Nicola Fuchs-Schündeln & Dirk Krueger & André Kurmann & Etienne Lalé & Alexander Ludwig & Irina Popova, 2023. "The Fiscal and Welfare Effects of Policy Responses to the Covid-19 School Closures," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(1), pages 35-98, March.
    2. Glover, Andrew & Heathcote, Jonathan & Krueger, Dirk & Ríos-Rull, José-Víctor, 2023. "Health versus wealth: On the distributional effects of controlling a pandemic," Journal of Monetary Economics, Elsevier, vol. 140(C), pages 34-59.
    3. Nicola Fuchs-Schünde & Dirk Krueger & Alexander Ludwig & Irina Popova, 2022. "The Long-Term Distributional and Welfare Effects of Covid-19 School Closures," The Economic Journal, Royal Economic Society, vol. 132(645), pages 1647-1683.
    4. Martin S Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2021. "The Macroeconomics of Epidemics [Economic activity and the spread of viral diseases: Evidence from high frequency data]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5149-5187.
    5. Moll, Benjamin & Kaplan, Greg & Violante, Giovanni, 2020. "The Great Lockdown and the Big Stimulus: Tracing the Pandemic Possibility Frontier for the U.S," CEPR Discussion Papers 15256, C.E.P.R. Discussion Papers.
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    More about this item

    Keywords

    COVID-19;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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