DP15474 Consumption Dynamics in the COVID Crisis: Real Time Insights from French Transaction & Bank Data

Author(s):	David Bounie, Youssouf Camara, Etienne Fize, John Galbraith, Camille Landais, Chloe Lavest, Tatiana Pazem, Baptiste Savatier
Publication Date:	November 2020
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Programme Areas:	Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=15474

We use anonymised transaction and bank data from France to document the evolution of consumption and savings dynamics since the onset of the pandemic. We find that consumption has dropped very severely during the nation-wide lockdown but experienced a strong and steady rebound during the Summer, before faltering in late September. This drop in consumption was met with a significant increase in aggregate households' net financial wealth. This excess savings is extremely heterogenous across the income distribution: 50% of excess wealth accrued to the top decile. Households in the bottom decile of the income distribution experienced a severe decrease in consumption, a decrease in savings and an increase in debt. We estimate marginal propensities to consume and show that their magnitude is large, especially at the bottom of the income and liquidity distributions.