IDEAS home Printed from https://ideas.repec.org/p/ifs/ifsewp/21-03.html

MPCs through COVID: spending, saving and private transfers

Author

Listed:
  • Thomas Crossley

    (Institute for Fiscal Studies and University of Essex and European University Institute)

  • Paul Fisher

    (Institute for Fiscal Studies)

  • Peter Levell

    (Institute for Fiscal Studies and Institute for Fiscal Studies)

  • Hamish Low

    (Institute for Fiscal Studies and University of Oxford & Nuffield College)

Abstract

MPCs were directly elicited from a representative sample of UK adults in July 2020 using receipt of a hypothetical unanticipated, one-time income payment. Reported MPCs are low, around 11% on average. They are higher, but still modest, for individuals in households with high current needs. These low MPCs may be a consequence of the prevailing economic un-certainty. Further, the fraction of respondents that report they would change their transfer payments to or from family and friends is almost as large as the fraction that report they would increase their spending. This means that targeting direct ?scal stimulus payments to high-MPC individuals could be partly undone, and that the aggregate MPC out of a stimulus payment need not equal the population-average MPC.

Suggested Citation

  • Thomas Crossley & Paul Fisher & Peter Levell & Hamish Low, 2021. "MPCs through COVID: spending, saving and private transfers," IFS Working Papers W21/03, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:21/03
    as

    Download full text from publisher

    File URL: https://ifs.org.uk/uploads/WP202103-MPCs-in-an-economic-crisis-spending-saving-and-private-transfers.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Bruno Albuquerque & Alexandra Varadi, 2022. "Consumption effects of mortgage payment," Bank of England working papers 963, Bank of England.
    2. Anantha Divakaruni & Peter Zimmerman, 2024. "Uncovering Retail Trading in Bitcoin: The Impact of COVID-19 Stimulus Checks," Management Science, INFORMS, vol. 70(4), pages 2066-2085, April.
    3. Dzung Bui & Lena Draeger & Bernd Hayo & Giang Nghiem, 2022. "The Marginal Propensity to Consume During the COVID-19 Pandemic: Evidence from Thailand and Vietnam," MAGKS Papers on Economics 202207, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    4. Albuquerque, Bruno & Green, Georgina, 2023. "Financial concerns and the marginal propensity to consume in COVID times: Evidence from UK survey data," Journal of Macroeconomics, Elsevier, vol. 78(C).
    5. Mosley, Max, 2021. "The importance of being earners: Modelling the implications of changes to welfare contributions on macroeconomic recovery," MPRA Paper 108620, University Library of Munich, Germany.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ifs:ifsewp:21/03. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Emma Hyman (email available below). General contact details of provider: https://edirc.repec.org/data/ifsssuk.html .

    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.