Working Paper
Homeowner Balance Sheets and Monetary Policy
This paper empirically identifies an important channel through which monetary policy affects consumer spending: homeowner balance sheets. A monetary loosening increases home values, thereby strengthening homeowner balance sheets and stimulating household spending due to a combination of collateral and wealth effects. The magnitude of these effects on a given household depends on local housing market characteristics such as local geography and regulation. Cities with the largest geographic and regulatory barriers to new construction see 3-4 percent responses in real house prices compared with unconstrained, elastic-supply cities where construction holds prices in check. Using non-public geocoded microdata from the Consumer Expenditures Survey, house price and consumption responses are compared across areas differing in local land availability and zoning laws to identify a marginal propensity to consume out of housing of 0.07. Homeowners with debt service ratios in the highest quartile have MPCs as high as 0.14 compared with negligible responses for those with low debt service ratios. This indicates a strong role for collateral effects, as opposed to pure wealth effects, in driving the relationship between home values and spending. I discuss the implications of these results for the aggregate effects and regional heterogeneity in responses to monetary shocks.
AUTHORS: Aladangady, Aditya
DATE: 2014-10-21

Working Paper
From Transactions Data to Economic Statistics: Constructing Real-time, High-frequency, Geographic Measures of Consumer Spending
Access to timely information on consumer spending is important to economic policymakers. The Census Bureau's monthly retail trade survey is a primary source for monitoring consumer spending nationally, but it is not well suited to study localized or short-lived economic shocks. Moreover, lags in the publication of the Census estimates and subsequent, sometimes large, revisions diminish its usefulness for real-time analysis. Expanding the Census survey to include higher frequencies and subnational detail would be costly and would add substantially to respondent burden. We take an alternative approach to fill these information gaps. Using anonymized transactions data from a large electronic payments technology company, we create daily estimates of retail spending at detailed geographies. Our daily estimates are available only a few days after the transactions occur, and the historical time series are available from 2010 to the present. When aggregated to the national leve l, the pattern of monthly growth rates is similar to the official Census statistics. We discuss two applications of these new data for economic analysis: First, we describe how our monthly spending estimates are useful for real-time monitoring of aggregate spending, especially during the government shutdown in 2019, when Census data were delayed and concerns about the economy spiked. Second, we show how the geographic detail allowed us quantify in real time the spending effects of Hurricanes Harvey and Irma in 2017.
AUTHORS: Aladangady, Aditya; Aron-Dine, Shifrah; Dunn, Wendy E.; Feiveson, Laura; Lengermann, Paul; Sahm, Claudia R.
DATE: 2019-08

Journal Article
High-frequency Spending Responses to the Earned Income Tax Credit
Many households face large, high-frequency changes in income and have limited financial buffers to smooth their consumption through this income volatility. However, few studies have quantified spending responses to such timing shifts in income due to a lack of high-frequency spending data. We use a new dataset of anonymized daily, state-level spending to study a two-week delay in federal tax refunds with an earned income tax credit (EITC) in 2017.
AUTHORS: Aladangady, Aditya; Aron-Dine, Shifrah; Cashin, David B.; Dunn, Wendy E.; Feiveson, Laura; Lengermann, Paul; Richard, Katherine; Sahm, Claudia R.
DATE: 2018-06-21

Journal Article
Do Lower Gasoline Prices Boost Confidence?
A gallon of gasoline currently costs one third less than it did last summer.
AUTHORS: Aladangady, Aditya; Sahm, Claudia R.
DATE: 2015-03-06

Journal Article
A Not-So-Great Recovery in Consumption : What is Holding Back Household Spending?
Historically, aggregate consumption has closely tracked disposable personal income, government transfers, and household net wealth. In this note, we show that this empirical relationship has broken down in recent years and explore potential explanations for why consumers--at least in the aggregate--may not be spending in line with recent income and wealth gains.
AUTHORS: Aladangady, Aditya; Feiveson, Laura
DATE: 2018-03-08

Journal Article
Living at Home Ain't Such a Drag (on Spending) : Young Adults' Spending In and Out of Their Parents' Home
In this Note, we quantify the net change in annual spending by a young adult who has just moved out of her parents' home.
AUTHORS: Aladangady, Aditya; Feiveson, Laura; Paciorek, Andrew D.
DATE: 2019-02-05

Journal Article
The Effect of Sales-Tax Holidays on Consumer Spending
Over the past decade, many U.S. states have enacted policies that temporarily exempt consumer purchases of certain goods from state sales taxes. In this note, we investigate whether the pre-announced sales-tax holidays noticeably alter the spending behavior of consumers. Specifically, we investigate whether there are shifts in the level and/or composition of consumer spending before, during, and after these sales-tax holidays.
AUTHORS: Aladangady, Aditya; Aron-Dine, Shifrah; Dunn, Wendy E.; Feiveson, Laura; Lengermann, Paul; Sahm, Claudia R.
DATE: 2017-03-24