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The covid-19 instruments’ effectiveness in mitigating the pandemic impact on Spanish consumption

Author

Listed:
  • Antonio Cutanda

    (Universidad de Valencia, Valencia, Spain)

  • Juan A. Sanchis

    (Universidad de Valencia and ERICES, Valencia, Spain)

Abstract

In this study, we evaluate how the COVID-19 pandemic affected households’ non-durable spending in 2020. To this end we compare actual individual effective spending with predictions derived from an estimated consumption function, using data from the Spanish SHF panel. Our findings show that the pandemic effect was significantly smaller in individuals than in aggregate NA data, particularly for income measures. Moreover, the estimated reduction in non-durable consumption is positively related to wealth but negatively related to household income. Additionally, we regress each individual estimated decline in non-durable spending on a broad set of indicators for different economic policy measures against the COVID-19. The results indicate that these kinds of interventions were unable to significantly support non-durable expenditure, which may account for the rise in savings during the pandemic.

Suggested Citation

  • Antonio Cutanda & Juan A. Sanchis, 2025. "The covid-19 instruments’ effectiveness in mitigating the pandemic impact on Spanish consumption," Working Papers 2501, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:2501
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    More about this item

    Keywords

    Consumer Spending; Panel data; COVID-19; Fiscal Policy;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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