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American Economic Review Vol. 103 No. 6 2013

Consumer Spending and the Economic Stimulus Payments of 2008

Jonathan A. Parker1; Nicholas S. Souleles2; David Johnson3; Robert McClelland4

1 Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208-2001. · 2 Finance Department, The Wharton School, 2300 SH-DH, University of Pennsylvania, Philadelphia, PA 19104-6367. · 3 Social, Economic, and Housing Statistics Division, US Census Bureau, Washington, DC 20233-8500. · 4 Tax Analysis Division, Congressional Budget Office, Ford House Office Building, Washington, DC 20515.

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Abstract

We measure the change in household spending caused by receipt of the economic stimulus payments of 2008, using questions added to the Consumer Expenditure Survey and variation from the randomized timing of disbursement. Households spent 12–30 percent (depending on specification) of their payments on nondurable goods during the three-month period of payment receipt, and a significant amount more on durable goods, primarily vehicles, bringing the total response to 50–90 percent of the payments. The responses are substantial and significant for older, lower-income, and home-owning households. Spending does not vary significantly with the method of disbursement (check versus electronic transfer).

DOI
10.1257/aer.103.6.2530
Volume
103
Issue
6
Pages
2530-2553
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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