Marginal Propensity to Consume and Personal Characteristics: Evidence from Bank Transaction Data and Survey

Kozo Ueda

No 23-007E, CIGS Working Paper Series from The Canon Institute for Global Studies

Abstract: The marginal propensity to consume (MPC) is heterogeneous and depends on liquidity, while liquidity is affected by both temporary circumstances and persistent characteristics. Using bank account transaction data and a survey of its account holders, this study aims to distinguish the sources of MPC heterogeneity. The results indicate that individuals with higher levels of risk aversion and time discount rates tend to exhibit a higher MPC, whereas lower wealth and tighter liquidity constraints are also linked to a higher MPC. These findings suggest that MPC heterogeneity is influenced by both temporary and persistent factors. JEL Classification Number: D14, E41

Keywords: marginal propensity to consume; special cash payment program; heterogeneity (search for similar items in EconPapers)
Pages: 31
Date: 2023-05
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Citations: View citations in EconPapers (3)

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