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MPCs were directly elicited from a representative sample of UK adults in July 2020 using receipt of a hypothetical unanticipated, one-time income payment. Reported MPCs are modest, around 11% on average. They are higher, but still modest, for individuals in households with high current needs. These low MPCs may be a consequence of the prevailing economic uncertainty. Significant fractions of respondents report they would use a windfall to pay down debt, or that they would change their transfer payments to or from family and friends. The latter means that the aggregate MPC out of a stimulus payment need not equal the population-average MPC.
Authors

Research Fellow University of Oxford
Hamish is the James Meade Professor of Economics at the University of Oxford, a Professorial Fellow of Nuffield College and a Research Fellow at IFS.

Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.

Deputy Research Director
Peter joined in 2009. He has published several papers on the microeconomics of household spending and labour supply decisions over the life-cycle.

Paul Fisher
Working Paper details
- DOI
- 10.1920/wp.ifs.2021.2621
- Publisher
- Institute for Fiscal Studies
Suggested citation
Crossley, T et al. (2021). MPCs in an economic crisis: spending, saving and private transfers. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/mpcs-economic-crisis-spending-saving-and-private-transfers (accessed: 17 February 2025).
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