Expected Post-Pandemic Consumption and Scarred Expectations from COVID-19

RePEc Short ID: pkn16
ORCID iD: 0000-0001-7378-916X

Dietrich, Alexander; Knotek, Edward S.; McMain, Michael; Myrseth, Kristian Ove R.; Schoenle, Raphael; Weber, Michael

doi:10.26509/frbc-ec-202111

Journal Article

Expected Post-Pandemic Consumption and Scarred Expectations from COVID-19

Abstract: The COVID-19 vaccination drive raises questions about the trajectory of the economic recovery and the pandemic’s impact on consumers’ longer-term behaviors. In this Commentary, we examine the evolution of consumers’ expectations for their post-crisis spending on services that have been dramatically curtailed by the pandemic: visiting restaurants, bars, and hotels, using public transportation, and attending crowded events. We document a U-shaped pattern of expected future use of these services, with growing pessimism in summer 2020 that had largely reversed by fall 2020—for most groups. More recently, higher-income individuals have indicated that they expect to sharply increase their use of these services compared with their pre-pandemic behaviors, but there has been a notable scarring of expectations among older Americans.

Keywords: COVID-19;

https://doi.org/10.26509/frbc-ec-202111