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Did the Shopping Coupon Program Stimulate Consumption? Evidence from Japanese Micro Data

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  • HORI Masahiro
  • HSIEH Chang-Tai
  • MURATA Keiko
  • SHIMIZUTANI Satoshi

Abstract

In March, 1999, the Japanese Government handed out "shopping coupons" worth 20,000 yen (about 200 dollars) to families for every child under the age of 15 and to roughly half of Japan's elderly population. In total, 25 percent of Japan's population received the coupons. The coupons expired after six months and had to be spent within the recipient's local community. We use variation in the impact of the program across families with different numbers of children and variation across prefectures to identify its impact on consumption. We control for "normal" seasonal patterns of consumption across families and prefectures by comparing the seasonal variation in consumption in the spring of 1999 with that in previous years when the coupons were not distributed. Our two sets of difference-in-difference estimates suggest that the MPC out of the coupons ranged between 0.2-0.3 in the first month the coupons were distributed. However, families that received coupons spent less in subsequent months, so the MPC falls to 0.1 when we measure the change in consumption over the next 3 or 4 months.

Suggested Citation

  • HORI Masahiro & HSIEH Chang-Tai & MURATA Keiko & SHIMIZUTANI Satoshi, 2002. "Did the Shopping Coupon Program Stimulate Consumption? Evidence from Japanese Micro Data," ESRI Discussion paper series 012, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esj:esridp:012
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    Cited by:

    1. Masahiro Hori & Satoshi Shimizutani, 2006. "Did Japanese consumers become more prudent during 1998-1999? Evidence from household-level data," International Economic Journal, Taylor & Francis Journals, vol. 20(2), pages 197-209.
    2. HORI Masahiro & SHIMIZUTANI Satoshi, 2002. "Micro Data Studies on Japanese Household Consumption," ESRI Discussion paper series 015, Economic and Social Research Institute (ESRI).
    3. Toshiyuki Uemura & Yoshimi Adachi & Tomoki Kitamura, 2017. "Effects of Individual Resident Tax on the Consumption of Near-Retired Households in Japan," Discussion Paper Series 161, School of Economics, Kwansei Gakuin University, revised May 2017.
    4. Ikuo Saito, 2016. "Fading Ricardian Equivalence in Ageing Japan," IMF Working Papers 2016/194, International Monetary Fund.
    5. Shimizutani, Satoshi, 2006. "Consumer response to the 1998 tax cut: Is a temporary tax cut effective?," Journal of the Japanese and International Economies, Elsevier, vol. 20(2), pages 269-287, June.
    6. HORI Masahiro & SHIMIZUTANI Satoshi, 2002. "Micro Data Studies on Japanese Tax Policy and Consumption in the 1990s," ESRI Discussion paper series 014, Economic and Social Research Institute (ESRI).

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