Publication type
Understanding Society Working Paper Series
Series Number
2022-02
Series
Understanding Society Working Paper Series
Authors
Publication date
March 2, 2022
Abstract:
Private transfers can affect the spending response to stimulus payments, as those receiving income windfalls may transfer resources to other households in greater financial need. We report a survey experiment where individuals were asked how they would respond to a £500 payment, with a randomly selected subset of individuals explicitly told that all households would receive the same payments (a ‘public windfall’ scenario). This additional information increased MPCs by 11%. Reported transfer intentions in response to windfalls suggest that public payments crowd out private transfers, partly accounting for the higher MPCs in the public windfall case.
Subjects
Notes
PLEASE CITE AS: Crossley, T.F., Fisher, P., Levell, P., and Low, H. (2023) 'Stimulus payments and private transfers', Economics Letters, 222:110944. https://doi.org/10.1016/j.econlet.2022.110944
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