_Finalist at the 2022 ECB Young Economist Prize_
**Presented at**: Boston University, Collegio Carlo Alberto, Universidad Carlos III de Madrid, IE University, Federal Reserve Board, European Central Bank, Central Bank of Italy, Central Bank of Denmark, Central Bank of the Netherlands, Central Bank of Lithuania, 2021 European Winter Meeting of the Econometric Society, BU-BC Green Line Macro Meeting, Theories and Methods in Macroeconomics, Philadelphia FED Mortgage Market Research Conference
How do households across euro area countries plan their spending during the covid-19 pandemic? Making use of the Consumer Expectation Survey administered by the European Central Bank, we find that current balance sheets positions, as well as expectations about individual and aggregate variables, play an important role in household planned expenditures in durables. Expectations about both house price growth and inflation shape such plans, and these impacts have been changing during the course of the pandemic. An increase in the number of covid-related deaths in the region where households reside sharply decreases their planned expenditures over the following 12 months. Additionally, we uncover significant heterogeneity across education levels, age, and housing tenure.
Households’ income fluctuations in poor countries call for risk smoothing mechanisms, yet insurance is always found to be incomplete. We build a two-goods complete markets model, and confirm this result with the UNPS - a new representative Uganda household-level panel data. The empirical evidence suggests that the degree of consumption insurance differs across consumption goods: Households insure food better than other non-durables.