Short-term impact of COVID-19 on consumption spending and its underlying mechanisms: Evidence from Singapore

Seonghoon Kim, Kanghyock Koh, Xuan Zhang

    Research output: Contribution to journalArticlepeer-review

    21 Citations (Scopus)

    Abstract

    We examine the short-term impact of COVID-19 on consumption spending and its underlying mechanisms using individual-level monthly panel data from Singapore. Although Singapore's case fatality rate was one of the lowest in the world in the early stage of the pandemic (0.05%), we find that the COVID-19 pandemic reduced household consumption spending by almost one quarter at its peak, with a larger response from households with above-median wealth. We show that the reduction in consumption spending is associated with the nationwide lockdown policy, heightened economic uncertainty and reduced income. In addition, we find a substantial increase in monthly savings among households without income losses, suggesting a substantial rebound in consumption spending after the lifting of the lockdown. The results from June 2020 confirm this conjecture, as we find that consumption spending rebounded by about 10 percentage points in that month.

    Original languageEnglish
    Pages (from-to)115-134
    Number of pages20
    JournalCanadian Journal of Economics
    Volume55
    Issue numberS1
    DOIs
    Publication statusPublished - 2022 Feb 1

    Bibliographical note

    Publisher Copyright:
    © 2022 Canadian Economics Association.

    ASJC Scopus subject areas

    • Economics and Econometrics

    Fingerprint

    Dive into the research topics of 'Short-term impact of COVID-19 on consumption spending and its underlying mechanisms: Evidence from Singapore'. Together they form a unique fingerprint.

    Cite this