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Saving by buying ahead : stockpiling in response to lump‐sum payments
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Collins, J. Michael and Kulka, Amrita (2023) Saving by buying ahead : stockpiling in response to lump‐sum payments. Fiscal Studies, 44 (4). pp. 451-484. doi:10.1111/1475-5890.12349 ISSN 0143-5671.
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Fiscal Studies - 2023 - Collins - Saving by buying ahead stockpiling in response to lump‐sum payments.pdf - Published Version - Requires a PDF viewer. Available under License Creative Commons Attribution 4.0. Download (1124Kb) | Preview |
Official URL: http://doi.org/10.1111/1475-5890.12349
Abstract
By purchasing larger quantities of goods and saving them for future consumption households are able to reduce transaction costs and acquire goods at a lower price per unit, presuming they can manage the transportation and storage costs. This study uses variations in state income tax refunds over time to estimate consumption responses to lump‐sum payments. Households purchase around 20 per cent more of easily stored toilet paper in the months in which tax refunds are issued, but do not increase purchases of perishables such as bread and eggs. In addition to purchasing more goods at a lower per‐unit price, households also appear to increase the time until their next purchase, which implies that they are saving goods for consumption over time. These in‐kind savings allow people to smooth their consumption over time, much like pecuniary savings. Government payments that provide lump‐sum payments can benefit consumers by providing additional liquidity to buy and store goods at a lower cost.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance H Social Sciences > HV Social pathology. Social and public welfare |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||
SWORD Depositor: | Library Publications Router | ||||||||
Library of Congress Subject Headings (LCSH): | Consumption (Economics), Emergency food supply , Saving and investment , Liquidity (Economics) | ||||||||
Journal or Publication Title: | Fiscal Studies | ||||||||
Publisher: | Wiley-Blackwell Publishing, Inc | ||||||||
ISSN: | 0143-5671 | ||||||||
Official Date: | December 2023 | ||||||||
Dates: |
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Volume: | 44 | ||||||||
Number: | 4 | ||||||||
Page Range: | pp. 451-484 | ||||||||
DOI: | 10.1111/1475-5890.12349 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Copyright Holders: | © 2023 The Authors. Fiscal Studies published by John Wiley & Sons Ltd. on behalf of Institute for Fiscal Studies. | ||||||||
Date of first compliant deposit: | 21 November 2023 | ||||||||
Date of first compliant Open Access: | 21 November 2023 | ||||||||
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