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Governments’ economic support for households during the COVID-19 pandemic and consumer confidence

Author

Listed:
  • Hassan F. Gholipour

    (Western Sydney University)

  • Reza Tajaddini

    (Swinburne University of Technology)

  • Mohammad Reza Farzanegan

    (Philipps-Universität Marburg
    CESifo
    ERF)

Abstract

To combat the adverse consequences of the COVID-19 pandemic, governments have implemented various economic policies. This study examines how different types of government economic support for households are associated with consumer confidence. Utilizing data from 35 countries in the Organization for Economic Co-operation and Development for January 2020–October 2021 and applying panel fixed effect and system generalized methods of moments regressions, we show that higher levels of government economic support lead to higher levels of consumer confidence. The results also suggest that government income support for households has a stronger impact than debt/contract relief on consumer confidence during the pandemic in the full sample. Moreover, we find that debt/contract relief is a more effective policy to boost confidence in emerging economies. Finally, COVID-19 fatalities have a significant negative effect on consumer confidence.

Suggested Citation

  • Hassan F. Gholipour & Reza Tajaddini & Mohammad Reza Farzanegan, 2023. "Governments’ economic support for households during the COVID-19 pandemic and consumer confidence," Empirical Economics, Springer, vol. 65(3), pages 1253-1272, September.
    • Handle: RePEc:spr:empeco:v:65:y:2023:i:3:d:10.1007_s00181-023-02367-0
    DOI: 10.1007/s00181-023-02367-0
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    Cited by:

    1. Farzanegan, Mohammad Reza & Gholipour, Hassan F., 2023. "COVID-19 fatalities and internal conflict: Does government economic support matter?," European Journal of Political Economy, Elsevier, vol. 78(C).

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    More about this item

    Keywords

    Consumer confidence; COVID-19 pandemic; Debt relief; Economic support; Income support; System GMM; OECD;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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