How do households respond to economic policy uncertainty? Evidence from China. Issue 1 (2nd January 2022)

• Record Type: Journal Article
• Authors: Chen, Yongwei; Fu, Dahai; Zhang, Ying
• Is Part Of: Applied economics letters. Volume 29:Issue 1(2022)
• Page Start: 80
• Page End: 83
• Publication Date: 2022-01-02
• Subjects: Economic policy uncertainty -- household income -- uncertainty shock -- consumption; D12 -- D14 -- E21; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2021.1971615
• Languages: English
• ISSNs: 1350-4851

Abstract

ABSTRACT: This article empirically examines the impacts of economic policy uncertainty (EPU) on household income and how they adjust their consumption expenditure and savings using a newly developed provincial EPU index in China. The findings show that the uncertainty shock lowers household income and households primarily responded by reducing their non-durable spending. The impacts of uncertainty shock are more pronounced in older, male-headed and urban households.