Daily Consumption Smoothing? New Evidence from a Payment Diary

Shaun Gilyard and Scott Schuh
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Shaun Gilyard: Coastal Carolina University
Scott Schuh: West Virginia University

No 25-04, Working Papers from Department of Economics, West Virginia University

Abstract: This paper shows that consumption and income data in the Diary of Consumer Payment Choice (DCPC) cover high percentages of U.S. data, forecast well in real time, and replicate the literature’s estimation and general rejection of PIH models with timeaggregated data. Novel estimates reveal evidence of daily consumption smoothing after accounting for three features of daily data: 1) discrepancy between consumption and expenditures (e.g., bill payments); 2) discrete daily expenditures and income; and 3) asynchronous consumption and income. Convenience samples used in the literature appear to reflect selection effects related to payment choices (cash or mobile) that affect model inference. Relative to bank transactions data, the DCPC is more representative, publicly available, and offers other advantages.

Keywords: Payment diary; consumer expenditures; consumption; income; payment instruments; budgeting; saving; personal financial management; sample selection (search for similar items in EconPapers)
JEL-codes: D12 D14 E21 (search for similar items in EconPapers)
Pages: 92 pages
Date: 2025-10
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Persistent link: https://EconPapers.repec.org/RePEc:wvu:wpaper:25-04

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