Title: Explaining the Income and Consumption Effects of COVID in India
Authors: Anup Malani, Arpit Gupta, Bartek Woda
Discussant: Mushfiq Mobarak

We conducted the 8th Consumer Pyramids Research Seminar on 25 March 2021 at 7.00 PM IST.

Event Summary

Professor Arpit Gupta, Professor Anup Malani, and Bartek Woda presented findings from their study on the income and consumption effects of the pandemic. Their study extends the existing literature on consumption insurance by examining the extent of insurance households had during the COVID-19 pandemic.

The researchers employed the CPHS dataset with over 174000 households to look at employment, income, time-use, and consumption expenditure. The paper documents trends in income and consumption till October 2020, with results disaggregated by occupations, location, and income quartiles given the significant variation.

Households appeared to be well-insured on food which they managed by reallocating consumption away from items such as clothing and shoes. Across all occupation categories there were similar degrees of consumption decline despite differences in income decline, indicating consumption smoothing. With respect to labour, they found massive increases in unemployment and an increase in people shifting from one occupation to another. Many individuals who were out of the labour force re-entered as well.

Prof Mushfiq Mobarak, the discussant for the paper, commended CPHS for its data quality. He advised the researchers to discuss the fall in survey response rates during the pandemic, and to explore the data on migrants in the CPHS panel to incorporate them into the analysis. Lastly, he outlined several questions and policy-relevant avenues for the researchers to investigate.

Following Prof. Malani’s response to the comments, Kaushik Krishnan, Chief Economist at CMIE, discussed how the CPHS data could be used to study the areas outlined for future work, as well as the response rates during the pandemic. The session concluded with a lively, insightful discussion amongst all the members of the panel.

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