A recent study conducted by the Institute for Research in Economic and Fiscal (IREF) sheds light on the investment behavior of Indians residing in districts most impacted by the COVID-19 pandemic. Titled ‘Gold in household portfolios during a pandemic: Evidence from India’, the study reveals significant trends in gold investment patterns across different regions.
Key Findings:
The study, authored by Oindrila Chatterjee, Balagopal Gopalakrishnan, and Sanket Mohapatra, examines the share of gold in household savings among residents of COVID-vulnerable districts (CVDs) compared to those in other regions. It found that individuals living in CVDs allocated a higher proportion of their savings towards gold investments.
Investment Disparities:
Specifically, the share of gold in household savings of individuals residing in CVDs was observed to be 6.9 percentage points higher than those in other districts. This disparity highlights a distinct investment trend influenced by the pandemic’s impact on different geographical areas.
Scope of the Study:
The study encompasses data from a comprehensive survey conducted across 142 districts spanning 21 states in India. The survey, conducted during the financial year 2021, provides valuable insights into the investment preferences of households amidst the pandemic-induced economic challenges.
Implications:
The findings underscore the significance of gold as a preferred asset class during times of uncertainty and crisis. Residents in COVID-affected districts demonstrate a heightened inclination towards gold investments, potentially driven by perceptions of stability and value retention during tumultuous times.
Policy Considerations:
Understanding the investment behavior of households in response to the pandemic can inform policy interventions aimed at bolstering economic resilience and promoting financial literacy. Policymakers may explore strategies to support diverse investment options while addressing the unique needs and preferences of different regions affected by the pandemic.
