Buying Less, but Shopping More: The Use of Non-Market Labor during a Crisis

Abstract

The current global financial crisis has caused output to drop in many developing countries, with the World Bank estimating that 55 million more people will live on less than $1.25 a day than expected precrisis. The extent to which the crisis will have long-term impacts depends on how poor people respond to the income declines. In this paper we use data from a previous economic crisis in Argentina to show the importance of a littlestudied mechanism that households can use to partly mitigate aggregate shocks, through changes in shopping behavior—in particular, in the amount of time devoted to shopping search.