431
Views
0
CrossRef citations to date
0
Altmetric
Research Article

How do households respond to economic policy uncertainty? Evidence from China

ORCID Icon, &
Pages 80-83 | Published online: 27 Aug 2021
 

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.

JEL CLASSIFICATION:

Acknowledgments

Yongwei Chen acknowledges the financial support from National Natural Science Foundation of China (grant no. 71773144) and Science and Technology Project of Zhejiang Province (grant no. 2021C35046). Dahai Fu highly appreciates the financial support from Humanity and Social Science Foundation of Ministry of Education of China (grant no. 20YJC790024) and Program for Innovation Research in Central University of Finance and Economics.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Several papers analyse the impact of political uncertainty on household behaviours (e.g. Giavazzi and McMahon Citation2012; Aaberge, Liu, and Zhu Citation2017). The political uncertainty is different from economic policy uncertainty.

2 Our findings remain consistent if we drop the province-specific fixed effects from the regressions.

3 The index can be downloaded from http://cedcdata.cufe.edu.cn/cedc/metadata/list.html

4 For more information about the CFPS, please access to http://www.isss.pku.edu.cn/cfps/

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [71773144]; Humanity and Social Science Foundation of Ministry of Education of China [20YJC790024]; Program for Innovation Research in Central University of Finance and Economics.

Log in via your institution

Log in to Taylor & Francis Online

PDF download + Online access

  • 48 hours access to article PDF & online version
  • Article PDF can be downloaded
  • Article PDF can be printed
USD 53.00 Add to cart

Issue Purchase

  • 30 days online access to complete issue
  • Article PDFs can be downloaded
  • Article PDFs can be printed
USD 205.00 Add to cart

* Local tax will be added as applicable

Related Research

People also read lists articles that other readers of this article have read.

Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine.

Cited by lists all citing articles based on Crossref citations.
Articles with the Crossref icon will open in a new tab.