Quotation Hanspal, Tobin, Weber, Annika, Wohlfart, Johannes. 2021. Exposure to the COVID-19 Stock Market Crash and its Effect on Household Expectations. Review of Economics and Statistics.




We survey a representative sample of US households to study how exposure to the COVID-19 stock market crash affects expectations and planned behavior. Wealth shocks are associated with upward adjustments of expectations about retirement age, desired working hours, and household debt, but have only small effects on expected spending. We provide correlational and experimental evidence that beliefs about the duration of the stock market recovery shape households' expectations about their own wealth and their planned investment decisions and labor market activity. Our findings shed light on the implications of household exposure to stock market crashes for expectation formation.


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  • Coronavirus
  • Inequality
  • Stock wealth shocks
  • Expectation formation

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Review of Economics and Statistics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, VW-A, WH-A
Language English
Title Exposure to the COVID-19 Stock Market Crash and its Effect on Household Expectations
Year 2021
Reviewed? Y
URL https://www.mitpressjournals.org/doi/abs/10.1162/rest_a_01011
DOI https://doi.org/10.1162/rest_a_01011
Open Access N


Hanspal, Tobin (Details)
Weber, Annika (Goethe University Frankfurt, Germany)
Wohlfart, Johannes (University of Copenhagen, Denmark)
Institute for Finance, Banking and Insurance IN (Details)
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