Consumption, Income Changes and Heterogeneity: Evidence from Two Fiscal Stimulus Programmes

Paolo Surico and Kanishka Misra

No 9530, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Almost half of American families did not adjust their consumption following receipt of the 2001 or 2008 tax rebates. Another 20%, with low income and more likely to rent, spent a small but significant amount. Households with large spending propensity held high mortgage debt. The heterogeneity is concentrated in a few non-durable categories and a handful of `new vehicle' purchases. The predictions of the heterogeneous response model appear far more accurate than their homogeneous response model counterparts, offering new insights on the evaluation of the two fiscal stimulus programmes.

Keywords: Fiscal policy; Heterogeneity; Stimulus payments (search for similar items in EconPapers)
JEL-codes: D91 E21 E62 H31 (search for similar items in EconPapers)
Date: 2013-06
New Economics Papers: this item is included in nep-mac and nep-pbe
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Citations: View citations in EconPapers (9)

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Journal Article: Consumption, Income Changes, and Heterogeneity: Evidence from Two Fiscal Stimulus Programs (2014)
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