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A Penny Saved: Prices and the Timing of Paycheck Receipt

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  • Beatty, Timothy K.M.

Abstract

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
    DOI: 10.22004/ag.econ.61008
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    References listed on IDEAS

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    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.
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    Cited by:

    1. Larionova, Marina (Ларионова, Марина) & Shelepov, Andrey (Шелепов, Андрей) & Sakharov, Andrey (Сахаров, Андрей) & Kolmar, Olga (Колмар, Ольга) & Safonkina, Elizaveta (Сафонкина, Елизавета) & Popova, I, 2018. "Comparative Analysis of the Formation of the New Development Bank (Nbb) and the Asian Bank for Infrastructure Investments (Abia) [Сравнительный Анализ Становления Нового Банка Развития (Нбр) И Азиа," Working Papers 041814, Russian Presidential Academy of National Economy and Public Administration.

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    Keywords

    Consumer/Household Economics;

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