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The revenue and welfare implications of digital coupon stimulus programs

Ying Chen, Jiaming Mao and Yue Wang

China Economic Review, 2025, vol. 91, issue C

Abstract: This study examines the impact of digital coupon programs on local businesses, using a large-scale program in Ningbo, China as a case study. Based on a regression discontinuity design, we find digital coupons to be a cost-effective method for local governments to generate immediate excess earnings for businesses during economic downturns. However, the impact was temporary and unevenly allocated. The majority of the excess revenues generated by the program went to large businesses, while small businesses benefited more on a percentage basis. Evaluating the distributional and welfare consequences of the program, we find that it led to both an improvement in total welfare for local businesses and a reduction in their revenue and welfare inequality.

Keywords: Fiscal stimulus program; Digital coupon; Inequality (search for similar items in EconPapers)
JEL-codes: P25 P36 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:91:y:2025:i:c:s1043951x25000549

DOI: 10.1016/j.chieco.2025.102396

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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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