Pandemic, Shutdown and Consumer Spending: Lessons from Scandinavian Policy Responses to COVID-19

By A. Andersen, E. Hansen, Niels Johannesen, Adam Sheridan. 2020

115 citations recorded by the source corpus.

This paper uses transaction data from a large bank in Scandinavia to estimate the effect of social distancing laws on consumer spending in the COVID-19 pandemic. The analysis exploits a natural experiment to disentangle the effects of the virus and the laws aiming to contain it: Denmark and Sweden were similarly exposed to the pandemic but only Denmark imposed significant restrictions on social and economic activities. We estimate that aggregate spending dropped by around 25 percent in Sweden and, as a result of the shutdown, by 4 additional percentage points in Denmark. This implies that most of the economic contraction is caused by the virus itself and occurs regardless of social distancing laws. The age gradient in the estimates suggest that social distancing reinforces the virus-induced drop in spending for low health-risk individuals but attenuates it for high-risk individuals by lowering the overall prevalence of the virus in the society.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/69741f41446bbcf8ad8f20a001ff8913f28c5fdb

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Initial Impacts of the Pandemic on Consumer Behavior: Evidence from Linked Income, Spending, and Savings Data (2020, background): “Our data is closest in structure to that in Andersen et al. (2020), which uses similar bank account data from a Scandinavian bank.”
Employment impact of Covid-19 crisis: from short term effects to long terms prospects (2020, background): “In fact, the economic effect of the pandemic occurs regardless of whether governments mandate an economic lock-down or not, as a recent experiment suggests (Andersen et al. 2020).”
Consumer responses to the Covid‐19 crisis: evidence from bank account transaction data (2020, unknown): “First, we require that customers held their main current account at Danske Bank between 1 January 2018 and the end of the sample period on 3 May 2020.(4) Second, we require that customers made at least one card payment in each month between January 2018 and December 2019.”