Stimulus Payments and Private Transfers

Thomas Crossley (), Paul Fisher, Peter Levell and Hamish Low

No 964, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Private transfers can affect the spending response to stimulus payments, as those receiving income windfalls may transfer resources to other households in greater financial need. We report a survey experiment where individuals were asked how they would respond to a £500 payment, with a randomly selected subset of individuals explicitly told that all households would receive the same payments (a ‘public windfall’ scenario). This additional information increased MPCs by 11%. Reported transfer intentions in response to windfalls suggest that public payments crowd out private transfers, partly accounting for the higher MPCs in the public windfall case.

Date: 2022-02-24
New Economics Papers: this item is included in nep-exp
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Journal Article: Stimulus payments and private transfers (2023)
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