A1566
Title: The impact of consumption stimulus design on the MPC: Evidence from a survey experiment
Authors: Kento Tango - Yokohama City University (Japan) [presenting]
Yoshiyuki Nakazono - Yokohama City University (Japan)
Jun Takahashi - Yokohama City University (Japan)
Abstract: While policymakers increasingly use non-cash consumption stimulus policies, there is little evidence comparing their effects on the marginal propensity to consume (MPC). An online survey in Japan examines how payment formats affect the MPC by eliciting self-reported spending responses to hypothetical windfall gains delivered in different formats: cash, time-limited vouchers, and cashless points. Three main findings emerge. First, consumption responses are broadly similar across payment formats. While more than half of respondents report no change in spending, those who do respond exhibit substantial increases in spending. Second, the average MPC is below 0.2 across all payment formats, with no substantial differences across formats. Third, MPC heterogeneity depends on the payment format even among individuals with identical observed characteristics. This suggests that households respond differently to identical payment benefits depending on the consumption stimulus design.
