IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v91y2025ics1043951x25000549.html

The revenue and welfare implications of digital coupon stimulus programs

Author

Listed:
  • Chen, Ying
  • Mao, Jiaming
  • Wang, Yue

Abstract

This study examines the impact of digital coupon programs on local businesses, using a large-scale program in Ningbo, China as a case study. Based on a regression discontinuity design, we find digital coupons to be a cost-effective method for local governments to generate immediate excess earnings for businesses during economic downturns. However, the impact was temporary and unevenly allocated. The majority of the excess revenues generated by the program went to large businesses, while small businesses benefited more on a percentage basis. Evaluating the distributional and welfare consequences of the program, we find that it led to both an improvement in total welfare for local businesses and a reduction in their revenue and welfare inequality.

Suggested Citation

  • Chen, Ying & Mao, Jiaming & Wang, Yue, 2025. "The revenue and welfare implications of digital coupon stimulus programs," China Economic Review, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:chieco:v:91:y:2025:i:c:s1043951x25000549
    DOI: 10.1016/j.chieco.2025.102396
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X25000549
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2025.102396?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Hunt Allcott & Rebecca Diamond & Jean-Pierre Dubé & Jessie Handbury & Ilya Rahkovsky & Molly Schnell, 2019. "Food Deserts and the Causes of Nutritional Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 1793-1844.
    2. Diogo G. C. Britto & Paolo Pinotti & Breno Sampaio, 2022. "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," Econometrica, Econometric Society, vol. 90(4), pages 1393-1423, July.
    3. Alessandro Di Nola & Leo Kaas & Haomin Wang, 2023. "Rescue policies for small businesses in the Covid-19 recession," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 579-603, December.
    4. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    5. Matthew S. Johnson & David I. Levine & Michael W. Toffel, 2023. "Improving Regulatory Effectiveness through Better Targeting: Evidence from OSHA," American Economic Journal: Applied Economics, American Economic Association, vol. 15(4), pages 30-67, October.
    6. Valerie A. Ramey, 2019. "Ten Years after the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 89-114, Spring.
    7. Guilherme Amorim & Diogo Britto & Alexandre Fonseca & Breno Sampaio, 2022. "Job Loss, Unemployment Insurance and Health: Evidence from Brazil," BAFFI CAREFIN Working Papers 22192, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    8. Jonathan A. Parker & Nicholas S. Souleles & David S. Johnson & Robert McClelland, 2013. "Consumer Spending and the Economic Stimulus Payments of 2008," American Economic Review, American Economic Association, vol. 103(6), pages 2530-2553, October.
    9. Charles A.E. Goodhart & Dimitrios P. Tsomocos & Xuan Wang, 2023. "Support for small businesses amid COVID‐19," Economica, London School of Economics and Political Science, vol. 90(358), pages 612-652, April.
    10. Nicholas S. Souleles & Jonathan A. Parker & David S. Johnson, 2006. "Household Expenditure and the Income Tax Rebates of 2001," American Economic Review, American Economic Association, vol. 96(5), pages 1589-1610, December.
    11. Jianwei Xing & Eric Yongchen Zou & Zhentoa Yin & Yong Wang & Zhenhua Li, 2023. ""Quick Response" Economic Stimulus: The Effect of Small-Value Digital Coupons on Spending," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(4), pages 249-304, October.
    12. Kanishka Misra & Paolo Surico, 2014. "Consumption, Income Changes, and Heterogeneity: Evidence from Two Fiscal Stimulus Programs," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 84-106, October.
    13. Clément de Chaisemartin & Xavier D’Haultfœuille, 2023. "Two-way fixed effects and differences-in-differences with heterogeneous treatment effects: a survey," The Econometrics Journal, Royal Economic Society, vol. 26(3), pages 1-30.
    14. Qiao Liu & Qiaowei Shen & Zhenghua Li & Shu Chen, 2021. "Stimulating Consumption at Low Budget: Evidence from a Large-Scale Policy Experiment Amid the COVID-19 Pandemic," Management Science, INFORMS, vol. 67(12), pages 7291-7307, December.
    15. Susan Athey & Lisa K. Simon & Oskar N. Skans & Johan Vikstrom & Yaroslav Yakymovych, 2023. "The Heterogeneous Earnings Impact of Job Loss Across Workers, Establishments, and Markets," Papers 2307.06684, arXiv.org, revised Mar 2026.
    16. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ming-Huan Liou & Shou-Yung Yin & Hsiang-Wen Mao, 2025. "Spending Behavior and Economic Impacts of Urban Digital Consumption Vouchers," Papers 2506.01385, arXiv.org, revised Jul 2025.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pennings,Steven Michael, 2020. "Cross-Region Transfers in a Monetary Union : Evidence from the US and Some Implications," Policy Research Working Paper Series 9244, The World Bank.
    2. Ninon Moreau-Kastler, 2025. "Proportional Treatment Effects in Staggered Settings: An Approach for Poisson Pseudo-Maximum Likelihood," Working Papers 031, EU Tax Observatory.
    3. Kanishka Misra & Vishal Singh & Qianyun (Poppy) Zhang, 2022. "Frontiers: Impact of Stay-at-Home-Orders and Cost-of-Living on Stimulus Response: Evidence from the CARES Act," Marketing Science, INFORMS, vol. 41(2), pages 211-229, March.
    4. Arne Henningsen & Guy Low & David Wuepper & Tobias Dalhaus & Hugo Storm & Dagim Belay & Stefan Hirsch, 2024. "Estimating Causal Effects with Observational Data: Guidelines for Agricultural and Applied Economists," IFRO Working Paper 2024/03, University of Copenhagen, Department of Food and Resource Economics.
    5. Christophe Blot & Jérôme Creel & Paul Hubert, 2019. "Challenges ahead for EMU monetary policy," Sciences Po Economics Publications (main) hal-03403244, HAL.
    6. André A. Castro & Philipp Ehrl, 2025. "Lean on me, firm: evidence from a management consulting program," Small Business Economics, Springer, vol. 65(1), pages 61-78, June.
    7. Corsetti, Giancarlo & Simonelli, Saverio & Acconcia, Antonio, 2015. "The Consumption Response to Liquidity-Enhancing Transfers: Evidence from Italian Earthquakes," CEPR Discussion Papers 10698, C.E.P.R. Discussion Papers.
    8. Jun, Dajung & Scott, Anthony, 2023. "The impact of changes in a physician fee schedule on medical expenditures, fees, and volume of services. Evidence from a national fee schedule reform in Australia," Social Science & Medicine, Elsevier, vol. 337(C).
    9. Bernard, René, 2023. "Mental accounting and the marginal propensity to consume," Discussion Papers 13/2023, Deutsche Bundesbank.
    10. Carranza, Rafael & Prieto, Joaquín & Sehnbruch, Kirsten, 2025. "Job loss and earnings inequality: Distributional effects of formal re-employment in Chile," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1020-1036.
    11. Jingbo Cui & Zhenxuan Wang & Haishan Yu, 2022. "Can International Climate Cooperation Induce Knowledge Spillover to Developing Countries? Evidence from CDM," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 923-951, August.
    12. Drange, Nina & Sandsør, Astrid Marie Jorde, 2024. "The effects of a free universal after-school program on child academic outcomes," Economics of Education Review, Elsevier, vol. 98(C).
    13. Daniel Lewis & Davide Melcangi & Laura Pilossoph, 2019. "Latent Heterogeneity in the Marginal Propensity to Consume," 2019 Meeting Papers 519, Society for Economic Dynamics.
    14. Chen, Jidong & Shi, Xinzheng & Zhang, Ming-ang & Zhang, Sihan, 2024. "Centralization of environmental administration and air pollution: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 126(C).
    15. Bernd Hayo & Matthias Uhl, 2017. "Taxation and consumption: evidence from a representative survey of the German population," Applied Economics, Taylor & Francis Journals, vol. 49(53), pages 5477-5490, November.
    16. Dimitris Christelis & Dimitris Georgarakos & Tullio Jappelli & Luigi Pistaferri & Maarten van Rooij, 2019. "Asymmetric Consumption Effects of Transitory Income Shocks," The Economic Journal, Royal Economic Society, vol. 129(622), pages 2322-2341.
    17. Bhorat, Haroon & Köhler, Timothy, 2025. "The labour market effects of cash transfers to the unemployed: Evidence from South Africa," World Development, Elsevier, vol. 188(C).
    18. Manuel Camilo Quesada Jiménez, 2026. "¿Descuento duro a la inseguridad alimentaria? Ara, D1 y Justo & Bueno en Bogotá [Hard Discount to Food Insecurity? Ara, D1 and Justo & Bueno in Bogota]," Documentos CEDE 2026-3, Universidad de los Andes, Facultad de Economía, CEDE.
    19. repec:cam:camjip:2507 is not listed on IDEAS
    20. Paul Bingley & Lorenzo Cappellari & Marco Ovidi, 2023. "When it hurts the most: timing of parental job loss and a child’s education," LISER Working Paper Series 2023-12, Luxembourg Institute of Socio-Economic Research (LISER).
    21. Ciani, Andrea & Stiebale, Joel, 2024. "Export Performance Under Domestic Anti-Dumping Protection," World Development, Elsevier, vol. 183(C).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:91:y:2025:i:c:s1043951x25000549. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.