Data and code for ""Dynamic Spending Responses to Wealth Shocks: Evidence from Quasi-lotteries on the Stock Market"

Principal Investigator(s): View help for Principal Investigator(s) Asger Lau Andersen, University of Copenhagen and CEBI; Niels Johannesen, Centre for Business Taxation, Oxford University, University of Copenhagen and CEBI; Adam Sheridan, Amazon

Version: View help for Version V1

Name	File Type	Size	Last Modified
Code			01/31/2024 10:56:AM
Codebooks			01/31/2024 10:43:AM
Data			03/22/2024 05:02:AM
LICENSE.txt	text/plain	2 KB	02/01/2024 12:50:AM
README.pdf	application/pdf	297.3 KB	03/28/2024 10:39:PM

Project Citation:

Andersen, Asger Lau, Johannesen, Niels, and Sheridan, Adam. Data and code for " “Dynamic Spending Responses to Wealth Shocks: Evidence from Quasi-lotteries on the Stock Market.” Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-07-30. https://doi.org/10.3886/E196641V1

Project Description

Summary:

How much and over what horizon do households adjust their consumption in response to stock market wealth shocks? We address these questions using granular data on spending and stock portfolios from a large bank and exploiting lottery-like variation in gains across investors with similar portfolio characteristics. Consistent with the permanent income hypothesis, spending responses to stock market gains are immediate and persistent. The monthly responses cumulate to marginal propensities to consume of 4.4% over one year and 16% over three years. The results suggest that inattention attenuates household responses to stock market cycles over horizons as long as one year.

Funding Sources: Danish National Research Foundation (DNRF134); Independent Research Fund Denmark (4182-00101B); Innovation Fund Denmark (5139-00019B); Economic Policy Research Network; Carlsberg Foundation

Scope of Project

Subject Terms: stock market returns; consumption; transaction data; wealth effect; financial inattention

JEL Classification:
      D12 Consumer Economics: Empirical Analysis
      E21 Macroeconomics: Consumption; Saving; Wealth
      E44 Financial Markets and the Macroeconomy

Geographic Coverage: Denmark

Time Period(s): 2009 – 2016

Data Type(s): aggregate data; program source code

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Published Versions

V1 [2024-07-30]

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DDI 2.5

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