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Marginal Propensity to Consume and Personal Characteristics: Evidence from Bank Transaction Data and Survey

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  • Kozo UEDA

Abstract

The marginal propensity to consume (MPC) is heterogeneous and depends on liquidity, while liquidity is affected by both temporary circumstances and persistent characteristics. Using bank account transaction data and a survey of its account holders, this study aims to distinguish the sources of MPC heterogeneity. The results indicate that individuals with higher levels of risk aversion and time discount rates tend to exhibit a higher MPC, whereas lower wealth and tighter liquidity constraints are also linked to a higher MPC. These findings suggest that MPC heterogeneity is influenced by both temporary and persistent factors. JEL Classification Number: D14, E41

Suggested Citation

  • Kozo UEDA, 2023. "Marginal Propensity to Consume and Personal Characteristics: Evidence from Bank Transaction Data and Survey," CIGS Working Paper Series 23-007E, The Canon Institute for Global Studies.
    • Handle: RePEc:cnn:wpaper:23-007e
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    References listed on IDEAS

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    Cited by:

    1. Kozo UEDA, 2023. "Marginal Propensity to Consume to Two-Time Income Shocks," CIGS Working Paper Series 23-008E, The Canon Institute for Global Studies.
    2. Kozo UEDA, 2024. "The Reality of Consumption: Comparing Self-Reported and Observed Marginal Propensity to Consume," CIGS Working Paper Series 24-020E, The Canon Institute for Global Studies.

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    More about this item

    Keywords

    marginal propensity to consume; special cash payment program; heterogeneity;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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