Consumption and debt response to unanticipated income shocks: Evidence from a natural experiment in Singapore?

American Economic Review

Volumn 104, Issue 12, 2014, Pages 3841-3884

  Agarwal, Sumit ^a   Qian, Wenlan ^a  

^a NATIONAL UNIVERSITY OF SINGAPORE   (Singapore)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84916919320     PISSN: 00028282     EISSN: 19447981     Source Type: Journal    
DOI: 10.1257/aer.104.12.4205     Document Type: Article

References (39)

1. Aaronson, Daniel, Sumit Agarwal, and Erik French. 2012. "Spending and Debt Response to Minimum Wage Hikes." American Economic Review 102 (7): 3111-39.
2. Abadie, Alberto, and Guido W. Imbens. 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects." Econometrica 74 (1): 235-67.
3. Agarwal, Sumit, Chunlin Liu, and Nicholas S. Souleles. 2007. "The Reaction of Consumer Spending and Debt to Tax Rebates-Evidence from Consumer Credit Data." Journal of Political Economy 115 (6): 986-1019.
4. Agarwal, Submit, and Wenlan Qian. 2014. "Consumption and Debt Response to Unanticipated Income Shocks: Evidence from a Natural Experiment in Singapore: Dataset." American Economic Review. http://dx.doi.org/10/1257/aer.104.12.4205.
5. Baker, Scott R. 2014. "Debt and the Consumption Response to Household Income Shocks." Unpublished.
6. Bertrand, Marianne, Esther Duflo, and Sendhil Mullainathan. 2004. "How Much Should We Trust Differences-in-Differences Estimates?" Quarterly Journal of Economics 119 (1): 249-75.
7. Browning, Martin, and Thomas F. Crossley. 2001a. "The Life-Cycle Model of Consumption and Saving." Journal of Economic Perspectives 15 (3): 3-22.
8. Browning, Martin, and Thomas F. Crossley. 2001b. "Unemployment Insurance Benefit Levels and Consumption Changes." Journal of Public Economics 80 (1): 1-23.
9. Carroll, Christopher D. 1992. "The Buffer-Stock Theory of Saving: Some Macroeconomic Evidence." Brookings Papers on Economic Activity 23 (2): 61-156.
10. Carroll, Christopher D. 1997. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis." Quarter Journal of Economics 112 (1): 1-55.
11. Gelman, Michael, Shachar Kariv, Matthew D. Shapiro, Dan Silverman, and Steven Tadelis. 2014. "Harnessing Naturally Occurring Data to Measure the Response of Spending Income." Science 345 (6193): 212-15.
12. Gertler, Paul, and Jonathan Gruber. 2002. "Insuring Consumption Against Illness." American Economic Review 92 (1): 51-76.
13. Gross, David B., and Nicholas S. Souleles. 2002. "Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data." Quarterly Journal of Economics 117 (1): 149-85.
14. Gruber, Jonathan. 1997. "The Consumption Smoothing Benefits of Unemployment Insurance." American Economic Review 87 (1): 192-205.
15. Ho, Teck-Hua, Ivan P. L. Png, and Sadat Reza. 2014. "Sunk Cost Fallacy in Driving the World's Costliest Cars." Unpublished.
16. Hsieh, Chang-Tai. 2003. "Do Consumers React to Anticipated Income Changes? Evidence from the Alaska Permanent Fund." American Economic Review 93 (1): 397-405.
17. Jappelli, Tullio, and Mario Padula. 2014. "The Consumption and Wealth Effects of an Unanticipated Change in Lifetime Resources." University of Naples, Centre for Studies in Economics and Finance (CSEF) Working Paper 354.
18. Jappelli, Tullio, Jörn-Steffen Pischke, and Nicholas S. Souleles. 1998. "Testing for Liquidity Constraints in Euler Equations with Complementary Data Sources." Review of Economics and Statistics 80 (2): 251-62.
19. Jappelli, Tullio, and Luigi Pistaferri. 2010. "The Consumption Response to Income Changes." Annual Review of Economics 2: 479-506.
20. Jappelli, Tullio, and Luigi Pistaferri. 2014. "Fiscal Policy and MPC Heterogeneity." American Economic Journal: Macroeconomics 6(4): 107-36.
21. Johnson, David S., Jonathan A. Parker, and Nicholas Souleles. 2006. "Household Expenditure and the Income Tax Rebates of 2001." American Economic Review 96 (5): 1589-1610.
22. Leth-Petersen, Soren. 2010. "Intertemporal Consumption and Credit Constraints: Does Total Expenditure Respond to an Exogenous Shock to Credit?" American Economic Review 100 (3): 1080-1103.
23. Parker, Jonathan A. 1999. "The Reaction of Household Consumption to Predictable Changes in Social Security Taxes." American Economic Review 89 (4): 959-73.
24. Parker, Jonathan A., Nicholas S. Souleles, David S. Johnson, and Robert McClelland. 2013. "Consumer Spending and the Economic Stimulus Payments of 2008." American Economic Review 103 (6): 2530-53.
25. Paxson, Christina H. 1993. "Consumption and Income Seasonality in Thailand." Journal of Political Economy 101 (1): 39-72.
26. Poterba, James M. 1988. "Are Consumers Forward Looking? Evidence from Fiscal Experiments." American Economic Review 78 (2): 413-18.
27. Shapiro, Matthew D., and Joel Slemrod. 1995. "Consumer Response to the Timing of Income: Evidence from a Change in Tax Withholding." American Economic Review 85 (1): 274-83.
28. Shapiro, Matthew D., and Joel Slemrod. 2003a. "Consumer Response to Tax Rebates." American Economic Review 93 (1): 381-96.
29. Shapiro, Matthew D., and Joel Slemrod. 2003b. "Did the 2001 Tax Rebate Stimulate Spending? Evidence from Taxpayer Surveys." In Tax Policy and the Economy, edited by James M. Poterba, 83-109. Cambridge, MA: MIT Press.
30. Souleles, Nicholas S. 1999. "The Response of Household Consumption to Income Tax Refunds." American Economic Review 89 (4): 947-58.
31. Souleles, Nicholas S. 2000. "College Tuition and Household Savings and Consumption." Journal of Public Economics 77 (2): 185-207.
32. Souleles, Nicholas S. 2002. "Consumer Response to the Reagan Tax Cuts." Journal of Public Economics 85 (1): 99-120.
33. Stephens, Melvin Jr. 2003. "'3rd of tha Month': Do Social Security Recipients Smooth Consumption between Checks?" American Economic Review 93 (1): 406-22.
34. Stephens, Melvin Jr. 2006. "Paycheque Receipt and the Timing of Consumption." Economic Journal 116 (513): 680-701.
35. Stephens, Melvin Jr. 2008. "The Consumption Response to Predictable Changes in Discretionary Income: Evidence from the Repayment of Vehicle Loans." Review of Economics and Statistics 90 (2): 241-52.
36. Stephens, Melvin Jr., and Takashi Unayama. 2011. "The Consumption Response to Seasonal Income: Evidence from Japanese Public Pension Benefits." American Economic Journal: Applied Economics 3 (4): 86-118.
37. Wolpin, Kenneth. 1982. "A New Test of the Permanent Income Hypothesis: The Impact of Weather on the Income and Consumption of Farm Households in India." International Economic Review 23 (3): 583-94.
38. Zeldes, Stephen P. 1989a. "Consumption and Liquidity Constraints: An Empirical Investigation." Journal of Political Economy 97 (2): 305-46.
39. Zeldes, Stephen P. 1989b. "Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence." Quarterly Journal of Economics 104 (2): 275-98.