by Luc Arrondela, b, Frédérique Savignaca, and Kévin Tracolc
Relying on an original household survey (PATER survey), we document how the 2008-9 crisis affected households' wealth, expectations, and consumption plans in France. We then show that households experiencing losses relating to their housing or their financial wealth were more likely to change their plans by reducing consumption expenditure. Moreover, our results suggest a certain degree of heterogeneity in consumption reaction across individuals depending on their level of wealth, on the composition of their consumption basket, and on the type of shocks experienced (gains/losses). Besides the direct wealth effect, our results also provide evidence of the role played by changes in expectations on consumption plans (confidence channel).
JEL Codes: D12, E21, E44, C25.
Full article (PDF, 42 pages, 469 kb)
a Banque de France
b CNRS-Paris School of Economics
c Paris School of Economics