IDEAS home Printed from
   My bibliography  Save this paper

A Penny Saved: Prices and the Timing of Paycheck Receipt


  • Beatty, Timothy K.M.


This paper explores a puzzling empirical regularity: households pay less for foods as the time since receipt of their last paycheck increases. I leverage randomization with regard to paycheck timing to causally identify the effect of time since paycheck receipt on prices. Estimates of the decline in prices range between 5% and 6% percent, over the course of a month. I investigate several potential explanations for this behavior, including credit constraints and stockpiling. I find evidence that the effect is driven by low-income households and exacerbated by stockpiling behavior.

Suggested Citation

  • Beatty, Timothy K.M., 2010. "A Penny Saved: Prices and the Timing of Paycheck Receipt," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61008, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea10:61008

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Unit Values; Paycheck Timing; Permanent Income Hypothesis; Consumer/Household Economics; D91; E21;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth


    Access and download statistics


    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:ags:aaea10:61008. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.