Five facts about MPCs: Evidence from a randomized experiment

Johannes Boehm, Etienne Fize and Xavier Jaravel

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We present experimental evidence on the marginal propensity to consume (MPC) out of transitory transfers, distributing prepaid debit cards with different features. The one-month MPC is substantially higher with a card expiring after three weeks (61%), compared to a transfer without expiration (23%). The finding that households consume more when presented with an urgent spending need lends support to theories where the salience of treatments affects choices. We also estimate that the consumption response is concentrated in the first weeks after the transfer and that a large fraction of households has high MPCs, even those with high liquid wealth.

Keywords: marginal propensity to consume; randomized controlled trial; helicopter money (search for similar items in EconPapers)
Date: 2024-05-10
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Five Facts about MPCs: Evidence from a Randomized Experiment (2025)
Working Paper: Five facts about MPCs: evidence from a randomized experiment (2025)
Working Paper: Five facts about MPCs: evidence from a randomized experiment (2024)
Working Paper: Five Facts about MPCs: Evidence from a Randomized Experiment (2023)
Working Paper: Five Facts about MPCs: Evidence from a Randomized Experiment (2023)
Working Paper: Five Facts about MPCs: Evidence from a Randomized Experiment (2023)
Working Paper: Five Facts about MPCs: Evidence from a Randomized Experiment (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1998

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