Discussion Paper Details

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Title: Consumer Responses to the COVID-19 Crisis: Evidence from Bank Account Transaction Data

Author(s): Asger Lau Andersen, Emil Toft Hansen, Niels Johannesen and Adam Sheridan

Publication Date: May 2020

Keyword(s): consumer spending, COVID-19, Pandemic, shutdown and social distancing

Programme Area(s): Public Economics

Abstract: This paper uses transaction-level customer data from the largest bank in Denmark to estimate the change in consumer spending caused by the COVID-19 pandemic and the resulting shutdown of the Danish economy. We find that aggregate spending was on average 27% below the counterfactual level without the pandemic in the seven weeks following the shutdown. The spending drop was mostly concentrated on goods and services whose supply was directly restricted by the shutdown, suggesting a limited role for spillovers to non-restricted sectors through demand in the short term. The spending drop was larger for individuals with more ex ante exposure to the adverse consequences of the crisis in the form of job loss, wealth destruction, severe disease and disrupted consumption patterns and, most notably, for individuals with an ex post realization of crisis-related unemployment.

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Bibliographic Reference

Andersen, A, Hansen, E, Johannesen, N and Sheridan, A. 2020. 'Consumer Responses to the COVID-19 Crisis: Evidence from Bank Account Transaction Data'. London, Centre for Economic Policy Research.