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  3. American Economic Journal: Economic Policy
  4. February 2017
  5. Understanding Consumption Behavior: Evidence from Consumers' Reaction to Shopping Vouchers

Understanding Consumption Behavior: Evidence from Consumers' Reaction to Shopping Vouchers

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Abstract

This paper advances our understanding of consumption behavior using the 2009 Taiwan Shopping Voucher Program. This program was universal and well publicized, and its payment to each individual was medium-sized. Based on survey data, it is found that the marginal propensity to consume is about one quarter, which is comparable to findings obtained by previous studies on consumers'response to fiscal stimulus payments. Further, vendors' discounts for voucher users played a significant role in boosting the effectiveness of the program.

Citation

Kan, Kamhon, Shin-Kun Peng, and Ping Wang. 2017. "Understanding Consumption Behavior: Evidence from Consumers' Reaction to Shopping Vouchers." American Economic Journal: Economic Policy, 9 (1): 137-53. DOI: 10.1257/pol.20130426

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JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • E21 Macroeconomics: Consumption; Saving; Wealth
  • E62 Fiscal Policy
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