The reaction of consumer spending and debt to tax rebates – evidence from consumer credit data

We use a new panel dataset of credit card accounts to analyze how consumer 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 afterwards their spending increased, counter to the canonical 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. More generally, the results suggest that there can be important dynamics in consumers’ response to “lumpy” increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms

The reaction of consumer spending and debt to tax rebates; evidence from consumer credit data

The authors use a new panel data set of credit card accounts to analyze how consumers responded to the 2001 federal income tax rebates. They estimate the monthly response of credit card payments, spending, and debt, exploiting the unique, randomized timing of the rebate disbursement. They 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 canonical 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. More generally, the results suggest that there can be important dynamics in consumers' response to "lumpy" increases in income like tax rebates, working in part through balance-sheet (liquidity) mechanisms. ; Also issued as Payment Cards Center Discussion Paper No. 07-18Taxation ; Consumer credit

Directional weak mixing and sequence entropy n-tuples for a measure for Zq\mathbb{Z}^q-actions

In this paper, directional weak mixing systems are defined and the directional version of Koopman-von Neumann spectrum mixing theorem is deduced. The relation between directional weak mixing systems and classical weak mixing systems is given. Moreover, the notion of directional sequence entropy n-tuples for a measure is introduced and their properties are investigated. Meanwhile, we describle directional discrete spectrum systems and weak mixing systems via directional sequence entropy $2$-tuple. Finally, directional M-null systems and M-supe systems are defined and studied

Reconsider the Conceptual Problems of Republican Freedom - From the Logical Map of Christian List and Laura Valentini

Recently, professors Christian List and Laura Valentini attempt to develop a new concept of freedom, criticizing the ones under the liberal and republican traditions. Their strategy is to find a concept of freedom satisfying the robust and nonmoralized conditions and to argue that the liberal and republican conceptions are not plausible. However, my view is that List and Valentini do not reasonably criticize the republican conception led by Philip Pettit. In other words, they do not see the real problem of republican freedom so that the straw man fallacy would arise. The real issue for the republican freedom is the problem of political legitimacy, not the nonmoralized one. In this paper, I would like to examine the arguments from List and Valentini to explain why the real problem of republican freedom is the problem of political legitimacy. I would also explain that if we can take the issue seriously, then we know the relationship between the political freedom and the institution in a further step

The reaction of consumer spending and debt to tax rebates – evidence from consumer credit data

We use a new panel dataset 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 afterwards spending increased, counter to the canonical Permanent-Income model. For people whose most intensively used credit card account is in the sample, spending on that account rose by over $200 cumulatively over the nine months after rebate receipt, which represents over 40% of the average household rebate. Because these results relied exclusively on exogenous, randomized variation, they represent compelling evidence of a causal link from the rebate to spending. ; Further, we found significant heterogeneity in the response to the rebate across different types of consumers. Notably, spending rose most for consumers who were initially most likely to be liquidity constrained according to various criteria, for example consumers who appeared to be initially constrained by their credit limits (before making additional payments). By contrast, debt declined most (so saving rose most) for unconstrained consumers. These results suggest that liquidity constraints are important. More generally, we found that there can be important dynamics in consumers’ response to ‘lumpy’ increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms.Consumer behavior ; Consumer credit ; Credit cards

The Reaction of Consumer Spending and Debt to Tax Rebates -- Evidence from Consumer Credit Data

We use a new panel dataset 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 afterwards their spending increased, counter to the canonical 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. More generally, the results suggest that there can be important dynamics in consumers' response to "lumpy" increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms.

Do consumers choose the right credit contracts?

We find that on average consumers chose the contract that ex post minimized their net costs. A substantial fraction of consumers (about 40%) still chose the ex post sub-optimal contract, with some incurring hundreds of dollars of avoidable interest costs. Nonetheless, the probability of choosing the sub-optimal contract declines with the dollar magnitude of the potential error, and consumers with larger errors were more likely to subsequently switch to the optimal contract. Thus most of the errors appear not to have been very costly, with the exception that a small minority of consumers persists in holding substantially sub-optimal contracts without switching. Klassifikation: G11, G21, E21, E5

Sequence entropy for amenable group actions

We study the sequence entropy for amenable group actions and investigate systematically spectrum and several mixing concepts via sequence entropy both in measure-theoretic dynamical systems and topological dynamical systems. Moreover, we use sequence entropy pairs to characterize weakly mixing and null systems