Consumption Stimulus with Digital Coupons
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866918079239290880 |
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| author | Chen, Ying Li, Mingyi Mao, Jiaming Zhou, Jingyi |
| author_facet | Chen, Ying Li, Mingyi Mao, Jiaming Zhou, Jingyi |
| contents | We study consumption stimulus with digital coupons, which provide time-limited subsidies contingent on minimum spending. We analyze a large-scale program in China and present five main findings: (1) the program generates large short-term effects, with each $\yen$1 of government subsidy inducing $\yen$3.4 in consumer spending; (2) consumption responses vary substantially, driven by both demand-side factors (e.g., wealth) and supply-side factors (e.g., local consumption amenities); (3) The largest spending increases occur among consumers whose baseline spending already exceeds coupon thresholds and for whom coupon subsidies should be equivalent to cash, suggesting behavioral motivations; (4) high-response consumers disproportionately direct their spending toward large businesses, leading to a regressive allocation of stimulus benefits; and (5) targeting the most responsive consumers can double total stimulus effects. A hybrid design combining targeted distribution with direct support to small businesses improves both the efficiency and equity of the program. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2507_01365 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Consumption Stimulus with Digital Coupons Chen, Ying Li, Mingyi Mao, Jiaming Zhou, Jingyi General Economics Economics We study consumption stimulus with digital coupons, which provide time-limited subsidies contingent on minimum spending. We analyze a large-scale program in China and present five main findings: (1) the program generates large short-term effects, with each $\yen$1 of government subsidy inducing $\yen$3.4 in consumer spending; (2) consumption responses vary substantially, driven by both demand-side factors (e.g., wealth) and supply-side factors (e.g., local consumption amenities); (3) The largest spending increases occur among consumers whose baseline spending already exceeds coupon thresholds and for whom coupon subsidies should be equivalent to cash, suggesting behavioral motivations; (4) high-response consumers disproportionately direct their spending toward large businesses, leading to a regressive allocation of stimulus benefits; and (5) targeting the most responsive consumers can double total stimulus effects. A hybrid design combining targeted distribution with direct support to small businesses improves both the efficiency and equity of the program. |
| title | Consumption Stimulus with Digital Coupons |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2507.01365 |