Spend as you were told: Evidence from labeled COVID-19 stimulus payments in South Korea

• 成果类型: Article
• 署名作者: Kim, Seonghoon; Koh, Kanghyock; Lyou, Wonjun
• 署名单位: Singapore Management University; Korea University; University System of Ohio; Ohio State University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2023.104867
• 发表日期: 2023
• 关键词: Income fungibility; COVID-19 stimulus payments; Spending; Card transaction data

摘要

We test the income fungibility assumption from standard economic theory by analyzing spending responses to South Korea's labeled COVID-19 stimulus payments. We exploit unique policy rules for iden-tification: (1) recipients cannot use payments outside their province of residence, and (2) they can only use payments at establishments in pre-specified sectors. Using data on card transactions in Seoul, we find that households do not consider stimulus payments fungible. Compared to Seoul residents' benchmark spending responses to cash income gains by sector, the stimulus payments disproportionately increased Seoul residents' spending in the allowed sector compared to the non-allowed sector. The payments did not increase non-Seoul residents' card spending. Our results imply that labeled stimulus payments with usage restrictions can boost household consumption spending in targeted sectors or locations during eco-nomic recessions.(c) 2023 Elsevier B.V. All rights reserved.