2013 Conference

Financial Services

Financial Services

The Japanese government paid one-off fixed-amount allowance to all people in Japan in 2009 under the economic recession, which was carried out as one economic policy. People under 18 years-old and over 65 years-old received 20,000 yen ($250) per person and others received 12,000 yen ($150) per person. It was paid to representatives of each household all together. How did households use this allowance? Through this economic policy, we could observe the marginal propensity to consume. It was reported that transfer payments increased the marginal propensity to consume food away from home above that from labor income, and the marginal propensity to consume was different by race (Kinsey,1983). The purpose of this study is to explore determinants of marginal propensity to consume by receiving fixed-amount money unexpectedly.  We collected samples from 17th Japanese Panel Survey of Consumers (JPSC). Samples of this study were 913 married women's households whose family type was a  nuclear family. Regression analyses were done with an SPSS package.  Average fixed-amount allowance per household was 51,000 yen ($638) and that of couples with child(ren) was 59,000 yen ($738). About 20 % of households had not used this allowance until JPSC survey was conducted. We investigated variables which affected marginal propensity to consume by receiving fixed-amount money unexpectedly. In other words, we measured impact of fixed-amount allowance" policy. Economic variables such as income, stock, housing loan did not affect marginal propensity to consume. The government intended that additional income was consumed easily and stimulated the economy. The marginal propensity to consume did not depend on the level of income. It depended on the existence of children who were high school students. To stimulate economy under government budget restraint, it would be effective that the target should be set as the family with school-age children.