Source: https://research.stlouisfed.org/publications/economic-synopses/2024/06/28/uneven-consumption-growth-in-the-covid-19-economic-recovery

This paper by Juan M. Sánchez and Masataka Mori examines the growth of consumption during the economic recovery from the COVID-19 pandemic, specifically focusing on the spending patterns across different income groups in the United States. The paper uses data from the Bureau of Economic Analysis and income elasticity estimates from Aguiar and Bils (2015) to demonstrate a positive correlation between income elasticity and real consumption growth. The analysis suggests that goods and services with higher income elasticity, which are consumed more by wealthier individuals, experienced greater growth in spending during the recovery period. This finding suggests that the increased consumption by wealthier families may have played a significant role in the post-pandemic spending surge.