The Impact of the COVID-19 Pandemic on Consumption: Learning from High Frequency Transaction Data

Haiqiang Chen, Wenlan Qian, Qiang Wen

LHA Working Paper No.LHA20201003

May 2020


We use daily transaction data in 214 cities to study the impact of COVID-19 on consumption after China’s outbreak in late January 2020. Based on difference-in-differences estimation, daily offline consumption—via bank card and mobile QR code transactions—fell by 32%, or 18.57 million RMB per city, during the twelve-week period. Spending on goods and services were both significantly affected, with a decline of 33% and 34%, respectively; within finer categories, dining & entertainment and travel saw the greatest dip of 64% and 59%. The consumption decrease is prevalent across cities with the largest drop occurring in the epicenter Wuhan (by 70%). Consumption responded negatively to the day-to-day changes in epidemic severity while distancing measures remained stable. Consumption had rebounded back to the baseline level by the end of March but dropped to -20% in early April due to the elevated risk of a second wave of infections. We infer that China’s offline consumption decreased by over 1.22 trillion RMB in the three-month post-outbreak period, or 1.2% of China’s 2019 GDP. Our estimates suggest a significant economic benefit of containing the virus through a lessened consumption decrease and a faster consumption recovery.


JEL classification: E21, E62, E61

Keywords: COVID-19, coronavirus, pandemic, consumption, economic impact, policy response, fiscal stimulus, transaction data


Haiqiang Chen: Wang Yanan Institute for studies in Economics, Department of Finance, School of Economics, Xiamen University,

Wenlan Qian (corresponding author): Department of Finance, NUS Business School, National University of Singapore. ABFER and Fellow of Luohan Academy.

Qiang Wen: Wang Yanan Institute for studies in Economics, School of Economics, Xiamen University,

    Related Frontiers