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Daily Consumption Smoothing? New Evidence from a Payment Diary

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Listed:
  • Shaun Gilyard

    (Coastal Carolina University)

  • Scott Schuh

    (West Virginia University)

Abstract

This paper shows that consumption and income data in the Diary of Consumer Payment Choice (DCPC) cover high percentages of U.S. data, forecast well in real time, and replicate the literature’s estimation and general rejection of PIH models with timeaggregated data. Novel estimates reveal evidence of daily consumption smoothing after accounting for three features of daily data: 1) discrepancy between consumption and expenditures (e.g., bill payments); 2) discrete daily expenditures and income; and 3) asynchronous consumption and income. Convenience samples used in the literature appear to reflect selection effects related to payment choices (cash or mobile) that affect model inference. Relative to bank transactions data, the DCPC is more representative, publicly available, and offers other advantages.

Suggested Citation

  • Shaun Gilyard & Scott Schuh, 2025. "Daily Consumption Smoothing? New Evidence from a Payment Diary," Working Papers 25-04, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:25-04
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    File URL: https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=1255&context=econ_working-papers
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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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