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Who’s Ready to Spend? Constrained Consumption across the Income Distribution

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Abstract

Spending on goods and services that were constrained during the pandemic is expected to grow at a fast pace as the economy reopens. In this post, we look at detailed spending data to track which consumption categories were the most constrained by the pandemic due to social distancing. We find that, in 2019, high-income households typically spent relatively more on these pandemic-constrained goods and services. Our findings suggest that these consumers may have strongly reduced consumption during the pandemic and will likely play a crucial role in unleashing pent-up demand when pandemic restrictions ease.

Suggested Citation

  • David Dam & Davide Melcangi & Laura Pilossoph & Will Schirmer, 2021. "Who’s Ready to Spend? Constrained Consumption across the Income Distribution," Liberty Street Economics 20210513b, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:91627
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    Cited by:

    1. Christian Ragacs & Richard Sellner & Klaus Vondra, 2021. "Economic recovery aided by coronavirus vaccine rollout. Economic outlook for Austria from 2021 to 2023 (June 2021)," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/21, pages 81-115.

    More about this item

    Keywords

    consumption; pandemic; COVID-19;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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