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Fiscal Stimulus and Households’ Non-Durable Consumption Expenditures: Evidence from the 2009 Australian Nation Building and Jobs Plan

Vol: 
1402
Author name: 
Aisbett, E
Brueckner, M
Steinhauser, R
Year: 
2013
Month: 
December
Abstract: 

In 2009 the Australian government delivered approximately $8 billion in direct payments to households. These payments were pre- announced and randomly allocated to households based on postal codes over a 5-week period. We exploit this random allocation to estimate the causal response of households’ non-durable consumption expenditures to a transitory, anticipated income increase. Our main findings are that: (i) non-durable consumption expenditures did not react significantly during or after the one-time, pre-announced transfer; (ii) there is a small, albeit statistically significant increase in non-durable consumption expenditures at the time of the announcement of the fiscal stimulus.

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