Pub Date : 2019-07-06DOI: 10.1017/S1365100519000725
Apostolos Serletis, Libo Xu
This paper takes a parametric approach to demand analysis and tests the weak separability assumptions that are often implicitly made in representative agent models of modern macroeconomics. The approach allows estimation and testing in a systems-of-equations context, using the minflex Laurent flexible functional form for the underlying utility function and relaxing the assumption of fixed consumer preferences by assuming Markov regime switching. We generate inference consistent with both theoretical and econometric regularity. We strongly reject weak separability of consumption and leisure from real money balances as well as weak separability of consumption from leisure and real money balances, meaning that the inclusion of a money in economic models would be of quantitative importance. We also investigate the substitutability/complementarity relationship among different categories of personal consumption expenditure (nondurables, durables, and services), leisure, and money. We find that the goods are net Morishima substitutes, but because of positive income effects they are gross complements. The implications for monetary policy are also briefly discussed.
{"title":"Consumption, Leisure, and Money","authors":"Apostolos Serletis, Libo Xu","doi":"10.1017/S1365100519000725","DOIUrl":"https://doi.org/10.1017/S1365100519000725","url":null,"abstract":"This paper takes a parametric approach to demand analysis and tests the weak separability assumptions that are often implicitly made in representative agent models of modern macroeconomics. The approach allows estimation and testing in a systems-of-equations context, using the minflex Laurent flexible functional form for the underlying utility function and relaxing the assumption of fixed consumer preferences by assuming Markov regime switching. We generate inference consistent with both theoretical and econometric regularity. We strongly reject weak separability of consumption and leisure from real money balances as well as weak separability of consumption from leisure and real money balances, meaning that the inclusion of a money in economic models would be of quantitative importance. We also investigate the substitutability/complementarity relationship among different categories of personal consumption expenditure (nondurables, durables, and services), leisure, and money. We find that the goods are net Morishima substitutes, but because of positive income effects they are gross complements. The implications for monetary policy are also briefly discussed.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121455704","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this study was to determine the effect of competitive prices, product completeness, and location on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat. Data analysis methods used are Reliability Test, Validity Test, Multiple Linear Regression Analysis, Determination Coefficient (R2), F test and t test. The results of the t test show that competitive prices have a positive and significant effect on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat, where the value of tcount (8.657)> t table (1.66159) with a significance level of 0.000 <0.05. Completeness of prices has a positive and significant effect on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat, where the value of tcount (5.427)> t table (1.662) with a significance level of 0.000 <0.05. Location has a positive and insignificant effect on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat, where the value of tcount (0.148).
{"title":"Effect of Competitive Prices, Completeness of Products, and Locations on Consumer Purchasing Decisions at Metro Electronics & Furniture Rantauprapat","authors":"Ade Parlaungan Nasution, Denny Ammari Ramadhan","doi":"10.2139/ssrn.3412703","DOIUrl":"https://doi.org/10.2139/ssrn.3412703","url":null,"abstract":"The purpose of this study was to determine the effect of competitive prices, product completeness, and location on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat. Data analysis methods used are Reliability Test, Validity Test, Multiple Linear Regression Analysis, Determination Coefficient (R2), F test and t test. The results of the t test show that competitive prices have a positive and significant effect on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat, where the value of tcount (8.657)> t table (1.66159) with a significance level of 0.000 <0.05. Completeness of prices has a positive and significant effect on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat, where the value of tcount (5.427)> t table (1.662) with a significance level of 0.000 <0.05. Location has a positive and insignificant effect on consumer purchasing decisions at Metro Electronics & Furniture Rantauprapat, where the value of tcount (0.148).","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"29 6","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120906301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The demographic change underway, declining adequacy levels from traditional pay-as-you-go old-age social security systems, structural reforms in pension schemes and the reduction in the traditional family support have increased the need for additional private savings to cover the old age income gap. In this paper we discuss the necessity, the role and the viability of home equity release schemes in supplementing public and private pensions in an integrated way. We use the latest European data from the Eurosystem Household Finance and Consumption Survey (HFCS) to analyse the household's wealth composition and accumulation process in the euro area. To quantify the size of the housing wealth and its potential to enhance existing and future retirement income, we compute the equity-to-value ratio (ETV) for all countries, estimate the time to loan payoff and compute the amount of home equity that is expected to be released over a 10-year period through regular monthly mortgage payments. We then catalogue and discuss the many alternative options for managing and accessing housing wealth over the life cycle, and highlight the main characteristics, risks, advantages and drawbacks of the two most important market products (home reversion plans and reverse mortgages). Finally, we discuss the main demand-side and supply-side obstacles and challenges to the development of equity release markets and extract some policy implications.
{"title":"Making Use of Home Equity: The Potential of Housing Wealth to Enhance Retirement Security","authors":"J. Bravo, M. Ayuso, R. Holzmann","doi":"10.2139/ssrn.3468604","DOIUrl":"https://doi.org/10.2139/ssrn.3468604","url":null,"abstract":"The demographic change underway, declining adequacy levels from traditional pay-as-you-go old-age social security systems, structural reforms in pension schemes and the reduction in the traditional family support have increased the need for additional private savings to cover the old age income gap. In this paper we discuss the necessity, the role and the viability of home equity release schemes in supplementing public and private pensions in an integrated way. We use the latest European data from the Eurosystem Household Finance and Consumption Survey (HFCS) to analyse the household's wealth composition and accumulation process in the euro area. To quantify the size of the housing wealth and its potential to enhance existing and future retirement income, we compute the equity-to-value ratio (ETV) for all countries, estimate the time to loan payoff and compute the amount of home equity that is expected to be released over a 10-year period through regular monthly mortgage payments. We then catalogue and discuss the many alternative options for managing and accessing housing wealth over the life cycle, and highlight the main characteristics, risks, advantages and drawbacks of the two most important market products (home reversion plans and reverse mortgages). Finally, we discuss the main demand-side and supply-side obstacles and challenges to the development of equity release markets and extract some policy implications.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122235908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study experimentally when, why, and how people intervene in others' choices. Choice Architects (CAs) construct opportunity sets containing bundles of time-indexed payments for Choosers. CAs frequently prevent impatient choices despite opportunities to provide advice, believing Choosers benefit. We consider several hypotheses concerning CAs' motives. A conventional behavioral welfarist acts as a correctly informed social planner; a mistakes-projective paternalist removes options she wishes she could reject when choosing for herself; an ideals-projective paternalist seeks to align others' choices with her own aspirations. Ideals-projective paternalism provides the best explanation for interventions in the laboratory and rationalizes support for actual paternalistic policies.
Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
{"title":"Projective Paternalism","authors":"Sandro Ambuehl, B. Bernheim, Axel Ockenfels","doi":"10.3386/w26119","DOIUrl":"https://doi.org/10.3386/w26119","url":null,"abstract":"We study experimentally when, why, and how people intervene in others' choices. Choice Architects (CAs) construct opportunity sets containing bundles of time-indexed payments for Choosers. CAs frequently prevent impatient choices despite opportunities to provide advice, believing Choosers benefit. We consider several hypotheses concerning CAs' motives. A conventional behavioral welfarist acts as a correctly informed social planner; a mistakes-projective paternalist removes options she wishes she could reject when choosing for herself; an ideals-projective paternalist seeks to align others' choices with her own aspirations. Ideals-projective paternalism provides the best explanation for interventions in the laboratory and rationalizes support for actual paternalistic policies.<br><br>Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at <a href=\"http://www.nber.org/papers/w26119\" TARGET=\"_blank\">www.nber.org</a>.<br>","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122948478","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We show information spillovers limit the effectiveness of targeted debt relief programs. We study individuals who learn about the likelihood of debt relief from the recent experiences of workplace peers filing for bankruptcy protection. Peers granted bankruptcy can discharge debts, while peers facing dismissal lose all protections. Exploiting the random assignment of judges to bankruptcy cases, we determine that individuals with a “dismissed peer” are significantly less likely to file for bankruptcy or enter foreclosure. We highlight a novel channel relating social networks to household finances and identify additional costs of granting individual debt relief imposed on lenders.
{"title":"Friends with Bankruptcy Protection Benefits","authors":"Kristoph Kleiner, Noah Stoffman, Scott E. Yonker","doi":"10.2139/ssrn.3287904","DOIUrl":"https://doi.org/10.2139/ssrn.3287904","url":null,"abstract":"Abstract We show information spillovers limit the effectiveness of targeted debt relief programs. We study individuals who learn about the likelihood of debt relief from the recent experiences of workplace peers filing for bankruptcy protection. Peers granted bankruptcy can discharge debts, while peers facing dismissal lose all protections. Exploiting the random assignment of judges to bankruptcy cases, we determine that individuals with a “dismissed peer” are significantly less likely to file for bankruptcy or enter foreclosure. We highlight a novel channel relating social networks to household finances and identify additional costs of granting individual debt relief imposed on lenders.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126667899","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose relaxing the first-order conditions in optimization to approximate rational consumer choice. Departures from the FOCs are assessed using an axiomatically founded measure that is also interpretable in terms of a money-pump multiplier. The framework encompasses measurement errors, information unobservable to the modeler, and consumer misperception. We develop testable implications for demand data, including for subclasses of regular utility functions, and develop the FOC-Departure Index (FDI), which is applicable in all contexts where the first-order approach is meaningful. We extend these ideas to convex budget sets. Our analysis extends to non-convex preferences under a narrower interpretation of price misperception.
我们提出放宽优化中的一阶条件以近似于理性消费者选择。对偏离focc的评估采用了一种基于公理的衡量方法，该方法也可以用货币泵乘数来解释。该框架包含了测量误差、建模者无法观察到的信息以及消费者的误解。我们为需求数据开发了可测试的含义，包括常规效用函数的子类，并开发了foco - departure Index (FDI)，它适用于所有一阶方法有意义的情况。我们将这些思想推广到凸预算集。我们的分析扩展到非凸偏好下的价格误解的狭义解释。
{"title":"Relaxed Optimization: Ε-Rationalizability and the Foc-Departure Index in Consumer Theory","authors":"Geoffroy de Clippel, Kareen Rozen","doi":"10.2139/ssrn.3527048","DOIUrl":"https://doi.org/10.2139/ssrn.3527048","url":null,"abstract":"We propose relaxing the first-order conditions in optimization to approximate rational consumer choice. Departures from the FOCs are assessed using an axiomatically founded measure that is also interpretable in terms of a money-pump multiplier. The framework encompasses measurement errors, information unobservable to the modeler, and consumer misperception. We develop testable implications for demand data, including for subclasses of regular utility functions, and develop the FOC-Departure Index (FDI), which is applicable in all contexts where the first-order approach is meaningful. We extend these ideas to convex budget sets. Our analysis extends to non-convex preferences under a narrower interpretation of price misperception.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122514395","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Vijay Victor, J. Thoppan, R. Nathan, Maria Fekete Farkas
The rapid advancements in information and communication technology during the third industrial revolution of the late 20th century has marked the beginning of a new era in the retail sector with the introduction of E-commerce. The dawn of the new century witnessed industry 4.0, revolutionizing all areas of online business by bringing in novel opportunities and possibilities.
Despite the progress in technology, the determination of correct pricing on online selling platforms still remains a very complex task. The adoption of big data technology has enabled online sellers to make real-time price changes of high magnitude and proximity. However, with increasing awareness among buyers regarding modern pricing strategies, it is necessary to examine probable changes in consumer behavior when exposed to dynamic pricing scenarios. This study investigates the factors that influence consumer behavior, and their prospective online purchase decisions in a dynamic pricing context, through an exploratory factor analysis approach. A primary research survey was conducted, and 178 samples were finalized for data analysis through a series of web surveys completed by respondents in India. This study identifies, measures and classifies 27 research items into variables, namely shopping experience, privacy concerns, awareness about dynamic pricing, buying strategy, fair price perceptions, reprisal intentions and intentions for self-protection. These seven factors could be used to explain consumer behavior in a dynamic pricing situation.
{"title":"Factors Influencing Consumer Behavior and Prospective Purchase Decisions in a Dynamic Pricing Environment — An Exploratory Factor Analysis Approach","authors":"Vijay Victor, J. Thoppan, R. Nathan, Maria Fekete Farkas","doi":"10.2139/ssrn.3412528","DOIUrl":"https://doi.org/10.2139/ssrn.3412528","url":null,"abstract":"The rapid advancements in information and communication technology during the third industrial revolution of the late 20th century has marked the beginning of a new era in the retail sector with the introduction of E-commerce. The dawn of the new century witnessed industry 4.0, revolutionizing all areas of online business by bringing in novel opportunities and possibilities.<br><br>Despite the progress in technology, the determination of correct pricing on online selling platforms still remains a very complex task. The adoption of big data technology has enabled online sellers to make real-time price changes of high magnitude and proximity. However, with increasing awareness among buyers regarding modern pricing strategies, it is necessary to examine probable changes in consumer behavior when exposed to dynamic pricing scenarios. This study investigates the factors that influence consumer behavior, and their prospective online purchase decisions in a dynamic pricing context, through an exploratory factor analysis approach. A primary research survey was conducted, and 178 samples were finalized for data analysis through a series of web surveys completed by respondents in India. This study identifies, measures and classifies 27 research items into variables, namely shopping experience, privacy concerns, awareness about dynamic pricing, buying strategy, fair price perceptions, reprisal intentions and intentions for self-protection. These seven factors could be used to explain consumer behavior in a dynamic pricing situation.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129565021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Customers often face multiple choices when purchasing a product or service. After making a choice, they sometimes have to wait for a while before receiving their purchased item due to the firm’s limited capacity to process orders. This paper incorporates the anticipated wait for receiving purchased products or services into customers’ choice behavior. The resulting choice model shares the same spirit of the rational expectation equilibrium, and captures the effects of negative externality caused by the anticipated wait, because all orders may be processed by a common facility. Our analysis shows that the anticipated wait may change the substitution patterns dramatically. We further investigate the effects of the anticipated wait on the decisions of capacity investment, product pricing and assortment planning. We establish the one-to-one mapping between the price vector and the choice probability vector, and show that the equivalent profit function of the choice probabilities is explicitly defined and more tractable. We characterize the multi-product price optimization problem under the MNL model with waiting. In addition to price competition, we also study the Cournot competition, in which the decision is the choice probability for each firm, and show that there exists a Nash equilibrium. For the assortment optimization, we identify the conditions under which the optimality of the revenue-ordered assortment still holds. Because the assortment problem with waiting is generally NP-hard, we develop efficient approximations with performance guarantee and also provide an easy-to-compute tight upper bound. The new model has the potential to increase prediction accuracy for customers’ choice behavior especially when customers faced with multiple choices are aware of the possible waiting for their purchased products. Failure to take into account the effects of the anticipated wait in customers’ purchase behavior may result in substantial losses to firms.
{"title":"Capacity, Pricing and Assortment Management under Discrete Choice Model with Anticipated Wait","authors":"Ruxian Wang","doi":"10.2139/ssrn.3579806","DOIUrl":"https://doi.org/10.2139/ssrn.3579806","url":null,"abstract":"Customers often face multiple choices when purchasing a product or service. After making a choice, they sometimes have to wait for a while before receiving their purchased item due to the firm’s limited capacity<br>to process orders. This paper incorporates the anticipated wait for receiving purchased products or services into customers’ choice behavior. The resulting choice model shares the same spirit of the rational expectation equilibrium, and captures the effects of negative externality caused by the anticipated wait, because all orders may be processed by a common facility. Our analysis shows that the anticipated wait may change the substitution patterns dramatically. We further investigate the effects of the anticipated wait on the decisions of capacity investment, product pricing and assortment planning. We establish the one-to-one mapping between the price vector and the choice probability vector, and show that the equivalent profit function of the choice probabilities is explicitly defined and more tractable. We characterize the multi-product price optimization problem under the MNL model with waiting. In addition to price competition, we also study the Cournot competition, in which the decision is the choice probability for each firm, and show that there exists a Nash equilibrium. For the assortment optimization, we identify the conditions under which the optimality of the revenue-ordered assortment still holds. Because the assortment problem with waiting is generally NP-hard, we develop efficient approximations with performance guarantee and also provide an easy-to-compute tight upper bound. The new model has the potential to increase prediction accuracy for customers’ choice behavior especially when customers faced with multiple choices are aware of the possible waiting for their purchased products. Failure to take into account the effects of the anticipated wait in customers’ purchase behavior may result in substantial losses to firms.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126687623","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although tertiary study is strongly associated with positive wealth outcomes, for those on the margin student debt can be a deterrent, a source of financial stress, or an indicator of irresponsible bad financial behaviour. In Australia, recent debate regarding the income-contingent loan (ICL) student debt scheme has highlighted gender differences in the ability to repay the debt. Drawing on the Australian HILDA Survey data for 2002–14, this study examined the gender differences for student debt holders, pinpointing some of the gender differences in the student debt trajectory and transitions over the sample period. Findings do show that student debtors in general are slightly less satisfied with their financial situation than the general population and are more likely to be from a socio-economically advantaged background. Results indicate that women are not particularly disadvantaged under the ICL scheme regarding the issues examined.
{"title":"Gender Issues in Income-Contingent Student Loans: Do Women Benefit?","authors":"Tracey West","doi":"10.2139/ssrn.3404747","DOIUrl":"https://doi.org/10.2139/ssrn.3404747","url":null,"abstract":"Although tertiary study is strongly associated with positive wealth outcomes, for those on the margin student debt can be a deterrent, a source of financial stress, or an indicator of irresponsible bad financial behaviour. In Australia, recent debate regarding the income-contingent loan (ICL) student debt scheme has highlighted gender differences in the ability to repay the debt. Drawing on the Australian HILDA Survey data for 2002–14, this study examined the gender differences for student debt holders, pinpointing some of the gender differences in the student debt trajectory and transitions over the sample period. Findings do show that student debtors in general are slightly less satisfied with their financial situation than the general population and are more likely to be from a socio-economically advantaged background. Results indicate that women are not particularly disadvantaged under the ICL scheme regarding the issues examined.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129540036","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using detailed household-level data from the Survey of Income and Program Participation, the ratio of credit card debt to income is found to be the most important balance sheet item in determining household usage of stimulus funds in 2008, adding to existing evidence that borrowing constraints are functions of debt-to-income ratios. Borrowing constrained households, often predicted to be the group with the largest propensity to consume out of stimulus funds, were the most likely to use stimulus payments to repay debt instead of increase consumption. This behavior is consistent with the fact that household credit supply was tightening at the same time that stimulus payments were being distributed, forcing households, especially those near their borrowing constraints, to deleverage.
{"title":"Household Finances and Fiscal Stimulus in 2008","authors":"M. Boutros","doi":"10.2139/ssrn.3716571","DOIUrl":"https://doi.org/10.2139/ssrn.3716571","url":null,"abstract":"Using detailed household-level data from the Survey of Income and Program Participation, the ratio of credit card debt to income is found to be the most important balance sheet item in determining household usage of stimulus funds in 2008, adding to existing evidence that borrowing constraints are functions of debt-to-income ratios. Borrowing constrained households, often predicted to be the group with the largest propensity to consume out of stimulus funds, were the most likely to use stimulus payments to repay debt instead of increase consumption. This behavior is consistent with the fact that household credit supply was tightening at the same time that stimulus payments were being distributed, forcing households, especially those near their borrowing constraints, to deleverage.","PeriodicalId":176300,"journal":{"name":"Microeconomics: Intertemporal Consumer Choice & Savings eJournal","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130974330","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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