The Effect of COVID-19 on Family Budget

Abstract

This paper explores the effect of “severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)” on the finances of middle-class families located in North India. COVID-19 pandemic has flare-up frenzy, nervousness, and sorrow level in both youth and adult individuals and changed food consumption preferences. To assess the financial effect of COVID-19 on individuals(households), a microeconomic model is created to appraise the immediate effect of COVID -19 on family income, savings, consumption, and expenses. The model assumes two periods: an assurance period during which people experience a stale income; and a crisis period, when families don't have a conviction on their pay and can utilize their savings to keep up the consumption of pre-crisis level during this emergency period.