Working Paper

Racial Heterogeneity in Consumption Responses to the Economic Impact Payment

Abstract: We investigate how the consumption responses to the Economic Impact Payment during the pandemic (commonly known as the pandemic stimulus check) differed across racial groups, and what accounts for the differences. If only family size and age are controlled, as in the baseline regression of Parker et al. (2022), in addition to race, Black and Hispanic households exhibit a higher marginal propensity to consume (MPC, preferred estimate being 0.29) than Whites (0.16) in response to monetary transfers under the Economic Impact Payment. This racial heterogeneity is accounted for by differences in liquid wealth holdings

JEL Classification: E21; E62; H31; J15;

https://doi.org/10.21799/frbp.wp.2026.06

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Working Papers

Publication Date: 2026-01-29

Number: 26-06