Spending response to cash transfers to shield households from inflation: Evidence from bank accounts

Oriol Aspachs, Alberto Graziano, Josep Mestres, Jose G. Montalvo and Marta Reynal-Querol

Economics Letters, 2024, vol. 238, issue C

Abstract: We use daily data from a large Spanish financial institution to analyze the spending responses to a one-off cash transfer to mitigate the impact of the surge in inflation during the 2022–2023 period. Using a staggered difference-in-differences estimator robust to treatment effect heterogeneity, we find that most of the expenditure is concentrated around the date of the transfer and that the average marginal propensity to spend is around 30%. The results are robust to changes in the main specification.

Keywords: Marginal propensity to spend; Inflation; Administrative data; High frequency data (search for similar items in EconPapers)
JEL-codes: D63 E24 J31 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524001678

DOI: 10.1016/j.econlet.2024.111684

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