I am reading: Would a stock market drop affect consumption?

Wealth and Consumption: Would a Stock Market Drop Really Cause a Recession - Stephen Cecchetti (2000)

A few facts 1990-2000

• US household wealth doubled to $44 Trillion
  
• the value of the stock market increased 300%
• household consumption increased 60% to $6.2 Trillion
• the ratio of savings to disposable income fell from 7.8% to 2.4%

Cecchetti notes that post 1995 the ratio of consumption to wealth dipped below the normal range of 17-21%. By 2000 from the perspective of a consumption to wealth ratio people were consuming as though the stock market were 25% lower that it actually was. This may have been due to a time lag to adjust consumption or uncertainty about the state of the stock market. He hypothesizes that a 25% drop in the stock market should have little impact on consumption - unless it generated a panic.