After a little light reading of “How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic” from the National Bureau of Economic Affairs, I wanted to share with you some tidbits I found interesting.
In late February until mid-March, stores were mobbed with long lines of people stockpiling groceries and other goods to prepare for the Coronavirus pandemic. Remember the “Great Toilet Paper Shortage” of 2020? First in line were households with children. Average transactions at Costco, Walmart, etc. were 50% higher than normal, which is understandable if a family is stockpiling. Men tended to buy less pre-Shelter-in-Place, and Millennials didn’t hit the stores until late. During this period, restaurant spending went down 30% and general shopping plummeted 50%.
Once stay-at-home orders went in place, a reduction in movement meant a reduction in spending across categories like retail, entertainment, travel, and public transportation. The only exception was credit card spending, which decreased much less and tended to be higher for democrats than republicans. This paper also looked at political factors.
This paper, as well as the French Statistical Service, estimate that overall spending will be down 35% during the pandemic. Silver lining… this could mean some savings for your family. I crunched my family’s spending numbers and we are on track to spend about 25% less than usual.
While extra cash in my bank account might be nice, I am still very much looking forward to life outside the 1 km radius of our home in Bordeaux.