With the widespread growth of online commerce, we observe an increasing amount of refunds on purchases. Do these refunds affect consumption differently than regular income such as salaries? This paper uses transaction-level data from a bank to examine the marginal propensity to consume (MPC) of...

Households in the Nielsen Consumer Panel were surveyed about their 2008 Economic Stimulus Payment. In estimates identified by the randomized timing of disbursement, the average household's spending rose by ten percent the week it received a Payment and remained high cumulating to 1.5–3.8...

Using a large, representative sample of high-frequency credit card transactions in the United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a 0.3 percent increase in credit card spending in response to a...

Using a large, representative sample of credit and debit card transactions in Singapore, this paper studies the consumption response of individuals whose same-building neighbors experienced personal bankruptcy. The unique bankruptcy rules in Singapore suggest liquidity shocks drive personal...

The Great Recession and the years that followed witnessed a dramatic expansion in the duration of unemployment insurance (UI) benefits available to unemployed workers in the United States. An important motivation for this policy was to stimulate demand by transferring funds to households that...

I show that conventional estimators based on the consumption Euler equation, extensively used in studies of intertemporal consumption behavior, produce inconsistent estimates of the effect of children on consumption if potentially binding credit constraints are ignored. As a more constructive...

This paper investigates the importance of status in household consumption and financial decisions using household data from the Survey of Consumer Finances (SCF) linked to neighborhood data in the American Community Survey (ACS). We find evidence that a household's income rank — its position...

We study whether households can distinguish persistent from transitory income shocks, and the implications for consumption-saving behavior. We construct a novel consumption-saving model where the household must infer the persistent component of its income process from actual income realizations...

I study the effects of borrowing and liquidity constraints on the response of consumption toanticipated income changes. Using the PSID over 1999–2013, I find that the well-documentedstrong excess sensitivity of consumption to income of highly constrained households can beexplained by episodes...

This paper studies the direct impact of households' debt on consumption over the business cycle. We use household-level panel data for Spain, and focus on a interesting period of analysis, 2002-2017, characterized by large variations in leverage, consumption, and asset prices. We find that debt...