Bank cards show how the other half lives in lockdown

Embargoed until: Publicly released: 2021-08-11 09:01

International

Clay Banks

Wealthy people tend to spend less and move less during lockdowns, while lower income communities remain much more mobile, according to an international study of bank transaction data. Researchers looked at billions of transactions through a large Spanish bank to track the impacts of the country's first lockdown. They found closing specific stores had a greater impact on spending than capacity restrictions, and wealthier neighbourhoods saw sharper declines in spending. People in lower income neighbourhoods continued to move around more than their wealthier counterparts during lockdown, providing more opportunities for the spread of COVID-19.

Media release

From: The Royal Society

Payments systems generate vast amounts of naturally occurring transaction data rarely used for constructing official statistics. We consider billions of transactions from card data from a large bank, BBVA, as an alternative source of information for measuring consumption. We show, via validation against official consumption measures, that it complements national accounts and consumption surveys. We then analyze the impact of COVID-19 in Spain, and document: (1) strong consumption responses to business closures, but smaller effects for capacity restrictions; (2) a steeper decline in spending in rich neighborhoods; (3) higher mobility for residents of lower-income neighborhoods, correlating with increased disease incidence.

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Journal/
conference: Royal Society Open Science

Research:Paper

Organisation/s: University of Cambridge, UK

Funder: V.M.C. gratefully acknowledges funding from the Leverhulme Trust and the European Research Council, grant no. 101001221, MICRO2MACRO. J.V.R.M. gratefully acknowledges the support of the UK Economic and Social Research Council (ESRC), award reference ES/L009633/1.

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