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Discussion Paper
Mixed Impacts of the Federal Tax Reform on Consumer Expectations
The Tax Cuts and Jobs Act of 2017 changed the tax brackets, tax rates, credits and deductions for individuals and similarly altered corporate tax rates, deductions and exclusions. In this post, we examine whether the reform has shifted individuals’ expectations about their financial situation and the macroeconomic outlook. We also ask whether households have already started to adjust their behavior in line with their expectations. In order to answer these questions, we use novel data from a special module of the New York Fed’s Survey of Consumer Expectations (SCE) fielded in February 2018 ...
Discussion Paper
Not Just “Stimulus” Checks: The Marginal Propensity to Repay Debt
Households frequently use stimulus checks to pay down existing debt. In this post, we discuss the empirical evidence on this marginal propensity to repay debt (MPRD), and we present new findings using the Survey of Consumer Expectations. We find that households with low net wealth-to-income ratios were more prone to use transfers from the CARES Act of March 2020 to pay down debt. We then show that standard models of consumption-saving behavior can be made consistent with these empirical findings if borrowers’ interest rates rise with debt. Our model suggests that fiscal policy may face a ...
Discussion Paper
An Update on How Households Are Using Stimulus Checks
In October, we reported evidence on how households used their first economic impact payments, which they started to receive in mid-April 2020 as part of the CARES Act, and how they expected to use a second stimulus payment. In this post, we exploit new survey data to examine how households used the second round of stimulus checks, issued starting at the end of December 2020 as part of the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, and we investigate how they plan to use the third round authorized in March under the American Rescue Plan Act. We find remarkable ...
Report
Understanding migration aversion using elicited counterfactual choice probabilities
Residential mobility rates in the United States have fallen considerably over the past three decades. The cause of the long-term decline remains largely unexplained. In this paper we investigate the relative importance of alternative drivers of residential mobility, including job opportunities, neighborhood and housing amenities, social networks, and housing and moving costs, using data from two waves of the New York Fed?s Survey of Consumer Expectations. Our hypothetical choice methodology elicits choice probabilities from which we recover the distribution of preferences for location and ...
Discussion Paper
Consumers Increasingly Expect Additional Government Support amid COVID-19 Pandemic
The New York Fed’s Center for Microeconomic Data released results today from its April 2020 SCE Public Policy Survey, which provides information on consumers' expectations regarding future changes to a wide range of fiscal and social insurance policies and the potential impact of these changes on their households. These data have been collected every four months since October 2015 as part of our Survey of Consumer Expectations (SCE). Given the ongoing COVID-19 pandemic, households face significant uncertainty about their personal situations and the general economic environment when forming ...
Discussion Paper
New SCE Charts Include a Measure of Longer-Term Inflation Expectations
Today, the New York Fed introduces several new data series and interactive charts depicting findings from its Survey of Consumer Expectations (SCE). The SCE is a representative, internet-based monthly survey of a rotating panel of about 1,300 household heads in the United States. Since January 2014, we have been reporting findings from our monthly survey on U.S. households’ views on inflation, household income and spending growth, their expectations about the housing and labor market, and a range of other expectations about the economy and outcomes for their own household. In addition to ...
Report
Workers’ Perceptions of Earnings Growth and Employment Risk
In addition to realized earnings and employment shocks, forward-looking individuals are presumed to condition their consumption and labor supply decisions on their subjective beliefs about future labor market risks. This paper uses rich panel data to document considerable individual heterogeneity in earnings growth expectations and in the perceived likelihood of voluntary and involuntary job exits. We examine how expectations evolve over the working life and business cycle, and how they co-vary with macroeconomic expectations and personal experiences. While largely consistent with patterns in ...
Report
An anatomy of U.S. personal bankruptcy under Chapter 13
We build a structural model of Chapter 13 bankruptcy that captures salient features of personal bankruptcy under Chapter 13. We estimate our model using a novel data set that we construct from bankruptcy court dockets recorded in Delaware in 2001 and 2002. Our estimation results highlight the importance of debtor?s choice of repayment plan length for Chapter 13 outcomes under the restrictions imposed by the bankruptcy law. We use the estimated model to conduct policy experiments to evaluate the impact of more stringent provisions of Chapter 13 that impose additional restrictions on the length ...
Discussion Paper
The Survey of Consumer Expectations: A Look Back at the Past Decade
It has been a little over ten years since we started releasing findings from the Federal Reserve Bank of New York’s Survey of Consumer Expectations (SCE). In this post, we review some of the headline findings from the first decade of the survey’s history, highlighting the evolution of consumers’ expectations about inflation and labor market outcomes.
Discussion Paper
Introducing the SCE Public Policy Survey
Households cope with considerable uncertainty in forming plans and making decisions. This includes uncertainty about their personal situations as well as about their external environment. An important source of uncertainty arises from (often abrupt) changes in government policy, including changes in tax rates and in the benefit level of social programs. Tracking individuals’ subjective beliefs about future policy changes is important for understanding their behavior as consumers and workers. For example, knowing the extent to which tax changes and other shifts in public policy are ...