A Penny Saved: Prices and the Timing of Paycheck Receipt

This paper explores a puzzling empirical regularity: households pay less for foods as the time since receipt of their last paycheck increases. I leverage randomization with regard to paycheck timing to causally identify the effect of time since paycheck receipt on prices. Estimates of the decline in prices range between 5% and 6% percent, over the course of a month. I investigate several potential explanations for this behavior, including credit constraints and stockpiling. I find evidence that the effect is driven by low-income households and exacerbated by stockpiling behavior.


Issue Date:
2010
Publication Type:
Conference Paper/ Presentation
Record Identifier:
http://ageconsearch.umn.edu/record/61008
PURL Identifier:
http://purl.umn.edu/61008
Total Pages:
23
JEL Codes:
D91; E21
Series Statement:
Selected Paper
11254




 Record created 2017-04-01, last modified 2018-01-22

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