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

31 Pages Posted: 26 May 2020

See all articles by Asger Lau Andersen

Asger Lau Andersen

University of Copenhagen - Department of Economics

Emil Toft Hansen

University of Copenhagen

Niels Johannesen

University of Copenhagen

Adam Sheridan

University of Copenhagen

Multiple version iconThere are 2 versions of this paper

Date Written: May 25, 2020

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.

Keywords: COVID-19; consumer spending; pandemic; social distancing; shutdown

JEL Classification: D12, H31, I18

Suggested Citation

Andersen, Asger Lau and Hansen, Emil Toft and Johannesen, Niels and Sheridan, Adam, Consumer Responses to the COVID-19 Crisis: Evidence from Bank Account Transaction Data (May 25, 2020). Available at SSRN: https://ssrn.com/abstract=3609814 or http://dx.doi.org/10.2139/ssrn.3609814

Asger Lau Andersen (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Emil Toft Hansen

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

Niels Johannesen

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

Adam Sheridan

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

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