Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2021-11-11
Number: 21-096/VI
Author-Name: Alexander Hodbod
Author-Workplace-Name: European Central Bank
Author-Name: Cars Hommes
Author-Workplace-Name: Bank of Canada, University of Amsterdam, Tinbergen Institute
Author-Name: Stefanie J. Huber
Author-Workplace-Name: Bank of Canada, University of Amsterdam, Tinbergen Institute
Author-Name: Isabelle Salle
Author-Workplace-Name: University of Amsterdam, Tinbergen Institute
Title: The COVID-19 Consumption Game-Changer: Evidence from a Large-Scale Multi-Country Survey
Abstract: Prospective economic developments depend on the behavior of consumer spending. A key ques- tion is whether private expenditures recover once social distancing restrictions are lifted or whether the COVID-19 crisis has a sustained impact on consumer confidence, preferences, and, hence, spending. The elongated and profound experience of the COVID-19 crisis may durably affect consumer preferences. We conducted a representative consumer survey in five European countries in summer 2020, after the release of the first wave’s lockdown restrictions, and doc- ument the underlying reasons for households’ reduction in consumption in five key sectors: tourism, hospitality, services, retail, and public transports. We identify a large confidence shock in the Southern European countries and a shift in consumer preferences in the Northern Eu- ropean countries, particularly among high-income earners. We conclude that the COVID-19 experience has altered consumer behavior and that long-term sectoral consumption shifts may occur.
Classification-JEL: D12, D81, E21
Keywords: COVID-19, household behavior, consumption, expectations, experiences, consumer preferences, economic resilience, sectoral changes, zombification, fiscal policy.
File-URL: https://papers.tinbergen.nl/21096.pdf
File-Format: application/pdf
File-Size: 1.219.807 bytes
Handle: RePEc:tin:wpaper:20210096