Consumers during crisis: responses from the middle class in Argentina

This paper examines the responses of the Argentinean middle class consumers to the economic crisis of 2001-2002. Our results point not only to the absolute drop in consumption but also emphasize the total elimination of some of the items. The reductions occur gradually as the crisis deepens. Adjustments are likely to be made already in anticipation of the crisis. The subsequent reaction tends to be weaker than the initial one. The elimination of consumption follows a different pattern, however. The first response is weaker relative to the consecutive one. Cultural goods are most affected. Higher income households reduce and eliminate their expenditure to a lesser degree than the remaining middle-class families. The findings show similarity to the previous studies of the U.S. recession in the 1970s and the Asian crisis.