MPCs through COVID: spending, saving and private transfers

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

No W20/35, IFS Working Papers from Institute for Fiscal Studies

Abstract: MPCs were directly elicited from a representative sample of UK adults in July 2020. Reported MPCs are low, around 11% on average. They are higher, but still modest, for individuals in households with high current needs. These low MPCs may be a consequence of the prevailing economic uncertainty. Some respondents report that they would respond to a one-time income payment by transferring more to friends and family, others report they would see a decline in the payments received. Targeting payments to high-MPC individuals could be partly undone. Further, the aggregate MPC out of a stimulus payment need not equal the population-average MPC, even if all individuals receive the same payment.

Date: 2020-10-20
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Working Paper: MPCs through COVID: spending, saving and private transfers (2021)
Working Paper: MPCs through COVID: spending, saving and private transfers (2020)
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