cost of being poor retail price and consumer price search differences across inner city and suburban neighborhoods this research undertakes a carefully designed and detailed empirical study to gain insights into 1 the extent of price differentials between wealthy and poor neighborhoods 2 what induces such differentials especially the nature and intensity of competitive environments including mass merchandisers like wal mart and 3 their relative impacts it finds a price differential of about 10 15 for everyday items even after controlling for store size and competition prices are found to be 2 5 higher in poor areas it also finds that it is not the poverty level per se but access to cars that acts as a key determinant of consumers price search patterns

not only what but also when a theory of dynamic voluntary disclosure we examine a dynamic model of voluntary disclosure of multiple pieces of private information in our model a manager of a firm who may learn multiple signals over time interacts with a competitive capital market and maximizes payoffs that increase in both period prices we show perhaps surprisingly that in equilibrium later disclosures are interpreted more favorably even though the time the manager obtains the signals is independent of the value of the firm we also provide sufficient conditions for the equilibrium to be in threshold strategies

discretionary disclosure of proprietary information in a multisegment firm the seminal unraveling result in the disclosure literature posits that discretion inevitably leads to full disclosure even when such disclosure has detrimental consequences in this paper we revisit optimal disclosure of proprietary information when firms compete in multiple markets the analysis demonstrates that in the presence of multiple segments the unraveling result applies at the firmwide level but not necessarily segment by segment instead when the firm has an ex ante desire to withhold information and segments are sufficiently similar the ex post disclosure equilibrium entails aggregation of segment details aggregation arises because any ex post temptation to disaggregate and reveal particularly favorable news in one segment entails revealing unfavorable news in another segment a desire to balance profits across segments then leads a firm to disclose firmwide information a temptation that cannot be avoided but only in the aggregate

evaluating interval forecasts a complete theory for evaluating interval forecasts has not been worked out to date most of the literature implicitly assumes homoskedastic errors even when this is clearly violated and proceed by merely testing for correct unconditional coverage consequently i set out to build a consistent framework for conditional interval forecast evaluation which is crucial when higher order moment dynamics are present the new methodology is demonstrated in an application to the exchange rate forecasting procedures advocated in risk management

the elasticity of substitution between time and market goods evidence from the great recession we document a change in household shopping behavior during the great recession households purchased more on sale larger sizes and generic products and increased coupon usage and shopping at discount stores we estimate a decline in returns to shopping during the recession therefore the increase in shopping behavior implies a significant decrease in households opportunity cost of time using the estimated cost of time and time use data we estimate a high elasticity of substitution between market expenditure and time spent on nonmarket work we find that households smooth a sizable fraction of consumption by varying their time allocation during recessions

consumer response to the timing of income evidence from a change in tax withholding in 1992 the income tax withholding tables were adjusted so that withholding was reduced a typical worker received an extra 28 80 in take home pay per month in march through december 1992 to be offset by a lower tax refund in 1993 the change in withholding amounted to 0 5 percent of gdp president bush who proposed this change in his state of the union address intended that it provide a temporary stimulus to demand but the policy change involved only the timing of income so under the life cycle permanent income model it would be predicted to have a negligible effect on consumption and aggregate demand this paper reports consumers responses to the change in withholding the results are based on a survey taken shortly after it went into effect forty three percent of consumers report spending the extra take home pay substantially more than the zero percent predicted by the standard models but substantially less than the one hundred percent upon which the policy was predicated the decision to save the income is not explained by expected income growth therefore while behavior of many households is not fully consistent with the life cycle permanent income model liquidity constraints do not appear to account for this behavior this abstract was borrowed from another version of this item

consumer spending and the economic stimulus payments of 2008 abstract we measure the change in household spending caused by receipt of the economic stimulus payments of 2008 using questions added to the consumer expenditure survey and variation from the ran

incorporating demographic variables in brand choice models an indivisible alternatives framework incorporating demographic variables in brand choice models is conceptually appealing and has numerous managerial benefits retailers and brand managers can assess geodemographic variations in demand and marketing mix response in order to implement micromarketing strategies for example a retailer planning to locate a new outlet can get some sense of the differences in demand patterns and price and promotion sensitivities in the new trading area in order to make initial stocking inventory pricing and promotion decisions for existing outlets retailers can fine tune the assortment and merchandising activities in a category to match local market conditions similarly a packaged goods manufacturers would benefit from getting a sense of whether they should stress promotional activity for one part of a brand s product line in some retail trading areas and other parts of the brand s line in other retail trading areas unfortunately a general finding across existing studies is that the impact of demographic variables on brand choice is neither strong nor consistent these findings are puzzling given that one would expect certain demographic variables such as income to have some influence on brand choice behavior moreover hoch et al hoch s j b d kim a j montgomery p e rossi 1995 determinants of store level price elasticity j marketing res 32february 17 29 using store level data find that a relatively small set of demographic variables is much more influential than competitive variables in explaining differences in price sensitivity across retail trading areas in light of such contradictory findings there is a need for a better conceptualization of the role of income and other demographic variables in household purchasing and this is the primary objective of this study this paper presents a microeconomic based framework called the indivisible alternatives ida framework to model household brand choice a key aspect of the ida framework is that it explicitly models alternatives in the market as being indivisible while past work has either explicitly or implicitly assumed perfect divisibility indivisibilities force a household s selection of a brand size and its level of category expenditure into a single joint decision hence demographic variables that influence category expenditure e g income also influence the choice of a brand size in addition since alternatives in the category come in several discrete sizes indivisibilities introduce differences in holding costs in the choice of a brand size combination consequently demographic factors that influence holding costs through consumption rate differences e g household size impact the choice of a brand size in a product category in this manner indivisibilities in market offerings naturally lead to differences in choice behavior across households that can be linked to demographic factors in a logical fashion in empirical applications to two different scanner panel data sets ketchup and ground coffee the proposed framework compares favorably with two benchmark specifications in terms of both goodness of fit and predictive validity the results from these product categories indicate that a household s price sensitivity is inversely related to its income level and that factors such as household size and seasonality which are likely to influence consumption rates make households more or less willing to buy larger package sizes income elasticity estimates from the model confirm that ceteris paribus households with lower incomes will have a higher propensity to purchase private labels and generic brands and a lower propensity to purchase national brands compared with households with higher incomes the micromarketing potential of the ida framework is explored in market simulations conducted for two different zip codes within a metropolitan area that vary with respect to income levels and other demographic factors the results indicate that for the product categories studied there are substantial differences across market areas in their response to the retail promotion of very large and very small package sizes within the same brand s product line the differences in response suggest that it may be beneficial to customize promotional programs to market areas based on their underlying demographic composition finally our findings suggest a link between household income and deal proneness that is conditional on other demographic variables and the expenditure required for the brand size in question specifically we find that smaller households with lower income levels are more likely to respond to promotions for smaller less expensive items within a category while larger households with higher incomes are more likely to respond to promotions for larger more expensive items within a category

test design and minimum standards we analyze test design and certification standards when an uninformed seller has the option to generate and disclose costly information regarding asset quality we characterize equilibria by a minimum principle the test and disclosure policy are chosen to minimize the asset s value conditional on nondisclosure thus when sellers choose the information provided simple pass fail certification tests are likely to dominate the market a social planner could raise informational and allocative efficiency and lower deadweight testing costs by raising the certification standard monopolist certifiers also satisfy the minimum principle but set a higher standard and reduce testing rates to maximize revenue

household expenditure and the income tax rebates of 2001 using questions expressly added to the consumer expenditure survey we estimate the change in consumption expenditures caused by the 2001 federal income tax rebates and test the permanent income hypothesis we exploit the unique randomized timing of rebate receipt across households households spent 20 to 40 percent of their rebates on nondurable goods during the three month period in which their rebates arrived and roughly two thirds of their rebates cumulatively during this period and the subsequent three month period the implied effects on aggregate consumption demand are substantial consistent with liquidity constraints responses are larger for households with low liquid wealth or low income

life cycle prices and production we use scanner data and time diaries to document how households substitute time for money through shopping and home production we document substantial heterogeneity in prices paid for identical goods for the same area and time with older households shopping the most and paying the lowest prices doubling shopping frequency lowers a good s price by 7 to 10 percent we estimate the shopper s price of time and use this series to estimate an elasticity of substitution between time and goods in home production of roughly 1 8 the observed life cycle time allocation implies a consumption series that differs markedly from expenditures

the impact of voluntary disclosure on a firm s investment policy in this paper we provide a model which describes how voluntary disclosure impacts on the timing of a firm s investment decisions a manager chooses a time to invest in a project and a time to disclose the investment return in order to maximise his monetary payoff we assume that this payoff is linked to the level of the firm s stock price prior to investing the profitability of the project and the market reaction to the disclosure of the investment return are uncertain but the manager receives signals at random points in time which assist in resolving some of this uncertainty we find that a manager whose objective can only be achieved through voluntarily disclosing the return is motivated to invest at a time that would be sub optimal for an identical manager with a profit maximising objective

quantifying market risk with value at risk or expected shortfall consequences for capital requirements and model risk the basel committee on banking supervision recently proposed fundamental changes in the regulatory treatment of financial institutions trading book positions among others a replacement of value at risk 0 99 by expected shortfall 0 975 for the quantification of market risk is recommended while this increases capital requirements for heavy tailed risks its consequences for model risk related to the estimation process have not been explored hence the aim of this paper is to analyze how both risk measures react to different sources of model risk in order to better understand the impact of the intended change in risk measures our results show that the expected shortfall 0 975 is more sensitive towards regulatory arbitrage and parameter misspecification we find that this is based on a trade off between a model s ability to better capture the heavy tailed behavior of risks and a higher vulnerability to model risk these new aspects should be taken into account in the regulatory decision for expected shortfall 0 975

expenditure response to increases in in kind transfers evidence from the supplemental nutrition assistance program recent studies on food stamp participant households marginal propensity to spend out of food stamps versus income have had contradictory results experimental studies have found household behavior aligns with standard economic theory where households marginal propensity to spend on food out of food stamps is equivalent to cash income observational studies nd that households have a larger marginal propensity to spend out of food stamps than cash income in this study we re examine this question by estimating how an unprecedentedly large increase in food stamp benets due to the implementation of the american recovery and reinvestment act aects food at home expenditure we nd that the policy change caused households to increase food at home expenditure as well as increase households share of total expenditure allocated toward food at home expenditure we compare these results to a time period without a meaningful food stamp policy change and nd our results are unique to the arra implementation time period

income and wealth effects on private label demand evidence from the great recession we measure the causal effects of income and wealth on the demand for private label products prior research suggests that these effects are large and in particular that private label demand rises during recessions our empirical analysis is based on a comprehensive household level transactions database matched with price information from store level scanner data and wealth data based on local house value indices the great recession provides a key source of the variation in our data showing a large and geographically diverse impact on household incomes over time we estimate income and wealth effects using within variation of income at the household level and wealth at the zip code level our estimates can be interpreted as income and wealth effects consistent with a consumer demand model based on utility maximization we establish a precisely measured negative effect of income on private label shares the effect of wealth is negative but not precisely measured however the estimated effect sizes

intertemporal dynamics of corporate voluntary disclosures while empirical evidence alludes to the intertemporal nature of corporate voluntary disclosures most of the existing theory analyzes firms voluntary disclosure decisions within single period settings introducing a repeated multiperiod disclosure setting we study the extent to which firms strategic disclosure behavior in the past affects their prosperity to provide voluntary disclosures in the future our analysis demonstrates that by voluntarily disclosing private information firms make an implicit commitment to provide similar disclosures in the future and therefore are less willing to voluntarily disclose information in the first place this effect is expected to be of larger magnitude for firms 1 with a long history of absence of voluntary disclosures and an impressive past operating performance or 2 that operate in a relatively stable and predictable business and information environment or 3 whose managers have a long time horizon and a high degree of risk aversion

selective disclosures in the presence of uncertainty about information endowment abstract this paper analyzes a setting where firms could have private information from various sources and disclose a selective subset of that information investors have uncertainty about how much information firms have using a stylized model where there are two signals about a firm s future value and the firm may be privately informed of none one or all of those signals this paper establishes an equilibrium link between the cutoff value characterizing the partially informed firm s disclosure strategy and the partition of the signal space characterizing the fully informed firm s disclosure strategy the paper also discusses potential extensions of the model

the effect of promotion on consumption buying more and consuming it faster the authors empirically demonstrate the existence of flexible consumption rates in packaged goods products how this phenomenon can be modeled and its importance in assessing the effectiveness of

market capitalization and value at risk abstract the potential of economic variables for financial risk measurement is an open field for research this article studies the role of market capitalization in the estimation of value at risk var we test the performance of different var methodologies for portfolios with different market capitalization we perform the analysis considering separately financial crisis periods and non crisis periods we find that var methods perform differently for portfolios with different market capitalization for portfolios with stocks of different sizes we obtain better var estimates when taking market capitalization into account we also find that it is important to consider crisis and non crisis periods separately when estimating var across different sizes this study provides evidence that market fundamentals are relevant for risk measurement

theories and tests of blind bidding in sealed bid auctions in this article we report the results from a series of laboratory markets in which sellers have better information about the quality of an item than any of the potential buyers sellers may voluntarily choose to reveal this information or they may instead decide to blind bid the item we find that a sequential equilibrium model where buyers assume the worst is a good predictor of behavior in these simple markets this equilibrium is not instantaneously attained however but there is an unraveling process which describes how this equilibrium is approached at the conclusion of the market allocations tend to be full efficient ex post

the reaction of consumer spending and debt to tax rebates evidence from consumer credit data we use a new panel data set of credit card accounts to analyze how consumers responded to the 2001 federal income tax rebates we estimate the monthly response of credit card payments spending and debt exploiting the unique randomized timing of the rebate disbursement we find that on average consumers initially saved some of the rebate by increasing their credit card payments and thereby paying down debt but soon afterward their spending increased counter to the permanent income model spending rose most for consumers who were initially most likely to be liquidity constrained whereas debt declined most so saving rose most for unconstrained consumers

improving daily value at risk forecasts the relevance of short run volatility for regulatory quality assessment abstract in this paper we present a novel perspective on data filtering and present an innovative wavelet based approach that leads to improved value at risk var forecasts a separation of financial conditional volatility into short mid and long run components allows us to study the relevance of these frequency components with respect to a regulatory quality assessment for daily var forecasts a simulation study and an analysis of daily market prices suggest that short and mid run information components cover the relevant information that is necessary for estimating adequate daily var excluding long run information components reduces daily var forecasts by up to 4 and does not impact the quality of regulatory back testing

poverty and economic decision making evidence from changes in financial resources at payday we study the effect of financial resources on decision making low income u s households are randomly assigned to receive an online survey before or after payday the survey collects measures of cognitive function and administers risk and intertemporal choice tasks the study design generates variation in cash checking and savings balances and expenditures before payday participants behave as if they are more present biased when making intertemporal choices about monetary rewards but not when making intertemporal choices about non monetary real effort tasks nor do we find before after differences in risk taking the quality of decision making the performance in cognitive function tasks or in heuristic judgments

what do high interest borrowers do with their tax rebate building on prior literature that constrained individuals consume the most out of a tax rebate we study the tradeoffs high interest borrowers face when they received their 2008 tax stimulus checks we find a persistent decline in payday borrowing in the pay cycles that follow the receipt of the tax rebate the reduction in borrowing is a significant fraction of the mean outstanding loan 12 and appears fairly persistent over the time but is moderate in dollar magnitude about 35 relative to the size of the rebate check 600 per person in trying to reconcile this finding with the cost of not retiring expensive payday debt we find substantial heterogeneity across borrowers among individuals that we classify as temptation spenders e g those that use 400 apr loans to buy electronic goods or go on vacation we find no reduction in payday borrowing after the tax rebate is issued but this group represents only a small fraction of payday borrowers a second group for which we find no debt retirement post check is the set of borrowers that appear to use what should be short term payday loans as a long term financing solution we infer that the marginal use of the tax rebate for this group was to deal with regular monthly obligations such as paying down late utility bills or making rent payments

the role of supplementary statements with management earnings forecasts we investigate managers decisions to supplement their firms management earnings forecasts we classify these supplementary disclosures as qualitative soft talk disclosures or verifiable forward looking statements we find that managers provide soft talk disclosures with similar frequency for good and bad news forecasts but are more likely to supplement good news forecasts with verifiable forward looking statements we examine the market response to these forecasts and find that bad news earnings forecasts are always informative but that good news forecasts are informative only when supplemented by verifiable forward looking statements supporting our argument that these statements bolster the credibility of good news forecasts

a decision support system for planning manufacturers sales promotion calendars a common event in the consumer packaged goods industry is the negotiation between a manufacturer and a retailer ofthe sales promotion calendar determining the promotion calendar involves a large number of decisions regarding levels of temporary price reductions feature ads and in store displays each executed at the level of individual retail accounts and brand skus over several months or a year though manufacturers spend much of their marketing budget on trade promotions they lack decision support systems to address the complexity and dynamics of promotion planning previous research has produced insights into how to evaluate the effectiveness of promotional events but has not addressed the planning problem in a dynamic environment this paper develops a disaggregate level econometric model to capture the dynamics and heterogeneity of consumer response by modeling the purchase incidence timing choice and quantity decisions of consumers we decompose total sales into incremental and nonincremental baseline plus borrowed the response model forms the basis of a market simulator that permits us to search for the manufacturer s optimal promotion calendar subject to a set of constraints some of them imposed by the retailer via the simulated annealing algorithm calendar profits are the net result of the contribution from incremental sales minus the opportunity cost from giving away discounts to nonincremental sales and the fixed costs associated with implementing promotional events e g retagging features displays incremental sales result from promotion induced switching the acceleration and quantity promotion effects on those switchers increased consumption and the carryover effect from purchase event feedback we applied our approach to the promotion planning problem of a large consumer packaged goods company in a nonperishable staple product category suggested by company executives canned tomato sauce subject to a retailer pass through constant rate of 80 provided to us by the collaborating firm the optimal promotion calendar produced by the modeling system followed a pattern of frequent and shallow temporary price reductions with no feature or display activity we also analyze how that result would change under different retailer pass through scenarios our findings indicated that the manufacturer could substantially improve the profitability of its sales promotion activity and that there would be a concurrent positive effect on retailer profit and volume levels management reported to us that the insights from the use of the system were implemented in their promotion planning process and produced positive results a validation analysis on follow up data for one market showed that promotion activity could be significantly reduced as recommended with no adverse effect on the brand s market share as predicted to generalize the model beyond the specific category where it was implemented we conducted a sensitivity analysis on the profile of the calendar i e frequency depth and duration of deals with respect to changes in market response competitive activity and retailer pass through first we found that the optimal depth frequency and timing of discounts is stable for price elasticities ranging from near zero to around four in absolute magnitude we also found no systematic impact of competitive promotions on the profile of the optimal calendar for example variation in competitive activity did not affect the optimal depth or frequency of discounts lastly we found changes in retailer pass through to have a significant effect on the optimal depth and number of weeks of trade promotion that a manufacturer should offer this emphasizes the importance to manufacturers of having accurate estimates of pass through for purposes of promotion budgeting and planning

optimal disclosure decisions when there are penalties for nondisclosure we study a seller of an asset who is liable for damages if the seller fails to disclose to buyers an estimate of the asset s value he knew prior to the sale our results include as either the damages multiplier that determines the size of the damages the seller must pay buyers increases or as the probability the seller is caught withholding his estimate from buyers increases the seller discloses his estimate less often and as the precision of the seller s estimate increases he sells a larger fraction of the asset

do the poor pay more for food evidence from the united kingdom does food cost more for low income households this paper compares two well known approaches to answering this question i find that quantity discounts for a broad range of foods are statistically significant and economically important however quantity discounting does not lead to the poor paying more for food i find that the poor pay less than average for the food they purchase this is explained by the poor spending a greater share of their income on foods where quantity discounting occurs copyright 2010 oxford university press

paycheque receipt and the timing of consumption this article examines the consumption response to monthly paycheque receipt since the amount and arrival date of paycheques are known in advance the receipt of a paycheque does not coincide with the receipt of new information under the basic rational expectations life cycle permanent income hypothesis household consumption should not respond to paycheque arrival using data from the uk s family expenditure survey this article finds that household consumption is excessively sensitive to paycheque receipt the results cannot be explained by any underlying monthly expenditure fluctuations common to all households the presence of liquidity constraints as measured by wealth and age can account for the excess sensitivity results

evidence games truth and commitment an evidence game is a strategic disclosure game in which an informed agent who has some pieces of verifiable evidence decides which ones to disclose to an uninformed principal who chooses a reward the agent regardless of his information prefers the reward to be as high as possible we compare the setup where the principal chooses the reward after the evidence is disclosed to the mechanism design setup where he can commit in advance to a reward policy the main result is that under natural conditions on the truth structure of the evidence the two setups yield the same equilibrium outcome

financial literacy financial education and downstream financial behaviors policy makers have embraced financial education as a necessary antidote to the increasing complexity of consumers financial decisions over the last generation we conduct a meta analysis of the relationship of financial literacy and of financial education to financial behaviors in 168 papers covering 201 prior studies we find that interventions to improve financial literacy explain only 0 1 of the variance in financial behaviors studied with weaker effects in low income samples like other education financial education decays over time even large interventions with many hours of instruction have negligible effects on behavior 20 months or more from the time of intervention correlational studies that measure financial literacy find stronger associations with financial behaviors we conduct three empirical studies and we find that the partial effects of financial literacy diminish dramatically when one controls for psychological traits that have been omitted in prior research or when one uses an instrument for financial literacy to control for omitted variables financial education as studied to date has serious limitations that have been masked by the apparently larger effects in correlational studies we envisage a reduced role for financial education that is not elaborated or acted upon soon afterward we suggest a real but narrower role for just in time financial education tied to specific behaviors it intends to help we conclude with a discussion of the characteristics of behaviors that might affect the policy maker s mix of financial education choice architecture and regulation as tools to help consumer financial behavior this paper was accepted by uri gneezy behavioral economics

consumer shopping behavior how much do consumers save this paper documents the potential and actual savings that consumers realize from four particular types of purchasing behavior purchasing on sale buying in bulk at a lower per unit price buying generic brands and choosing outlets how much can and do households save through each of these behaviors how do these patterns vary with consumer demographics we use data collected by a marketing firm on all food purchases brought into the home for a large nationally representative sample of u k households in 2006 we are interested in how consumer choice affects the measurement of price changes in particular a standard price index based on a fixed basket of goods will overstate the rise in the true cost of living because it does not properly consider sales and bulk purchasing according to our measures the extent of this bias might be of the same or even greater magnitude than the better known substitution and outlet biases

sales and consumer inventory temporary price reductions sales are common for many goods and naturally result in a large increase in the quantity sold we explore whether the data support the hypothesis that these increases are at least partly due to demand anticipation at low prices consumers store for future consumption this effect if present has broad economic implications we test the predictions of an inventory model using scanner data with two years of household purchases the results are consistent with an inventory model and suggest that static demand estimates may overestimate price sensitivity

improving the value at risk forecasts theory and evidence from the financial crisis abstract the recent financial crisis has raised numerous questions about the accuracy of value at risk var as a tool to quantify extreme losses in this paper we develop data driven var approaches that are based on the principle of optimal combination and that provide robust and precise var forecasts for periods when they are needed most such as the recent financial crisis within a comprehensive comparative study we provide the latest piece of empirical evidence on the performance of a wide range of standard var approaches and highlight the overall outperformance of the newly developed methods

frugality is hard to afford intertemporal savings strategies such as bulk buying or accelerating purchase timing to take advantage of a good deal provide long term savings in exchange for an increase in immediate spending

caviar conditional autoregressive value at risk by regression quantiles value at risk var has become the standard measure of market risk employed by financial institutions for both internal and regulatory purposes var is defined as the value that a portfolio will lose with a given probability over a certain time horizon usually one or ten days despite its conceptual simplicity its measurement is a very challenging statistical problem and none of the methodologies developed so far give satisfactory solutions interpreting the var as the quantile of future portfolio values conditional on current information we propose a new approach to quantile estimation which does not require any of the extreme assumptions invoked by existing methodologies such as normality or i i d returns the conditional autoregressive value at risk or caviar model moves the focus of attention from the distribution of returns directly to the behavior of the quantile we specify the evolution of the quantile over time using a special type of autoregressive process and use the regression quantile framework introduced by koenker and bassett to determine the unknown parameters since the objective function is not differentiable we use a differential evolutionary genetic algorithm for the numerical optimization utilizing the criterion that each period the probability of exceeding the var must be independent of all the past information we introduce a new test of model adequacy the dynamic quantile test applications to simulated and real data provide empirical support to this methodology and illustrate the ability of these algorithms to adapt to new risk environments

3rd of tha month do social security recipients smooth consumption between checks this paper examines the response of consumption expenditures to the monthly receipt of social security checks since the amount and arrival date of these checks are known to the recipients the basic life cycle permanent income hypothesis lcpih predicts that consumption should not respond to the receipt of these checks using daily diary data from the consumer expenditure survey this paper finds evidence that both the dollar amount and probability of expenditures increase immediately following the receipt of this check most relevant to testing the lcpih categories of instantaneous consumption expenditure such as food away from home increase on the check arrival date the response is found primarily amongst households for whom social security is the primary source of income however the magnitude of the estimated responses are relatively small and do not suggest that the utility losses are large from this non smoothing behavior this abstract was borrowed from another version of this item