òòò½Íø Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Consumer-Financed Fiscal Stimulus: Evidence from Digital Coupons in China
òòò½Íø Review: Insights
(pp. 411–27)
Abstract
In 2020, local governments in China began issuing digital coupons to stimulate spending in targeted categories such as restaurants and supermarkets. Using data from a large e-commerce platform and a bunching estimation approach, we find that the coupons caused large increases in spending of 3.1–3.2 yuan per yuan spent by the government. The large spending responses do not come from substitution away from nontargeted spending categories or from short-run intertemporal substitution. To rationalize these results, we develop a dynamic consumption model showing how coupons' minimum spending thresholds create temporary notches that lead to large spending responses.Citation
Ding, Jing, Lei Jiang, Lucy Msall, and Matthew J. Notowidigdo. 2025. "Consumer-Financed Fiscal Stimulus: Evidence from Digital Coupons in China." òòò½Íø Review: Insights 7 (3): 411–27. DOI: 10.1257/aeri.20240210Additional Materials
JEL Classification
- D15 Intertemporal Household Choice; Life Cycle Models and Saving
- E21 Macroeconomics: Consumption; Saving; Wealth
- H72 State and Local Budget and Expenditures
- L81 Retail and Wholesale Trade; e-Commerce
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- P25 Socialist Systems and Transitional Economies: Urban, Rural, and Regional Economics
- P36 Socialist Institutions and Their Transitions: Consumer Economics; Health; Education and Training: Welfare, Income, Wealth, and Poverty