Professor Andrew LeighThe share of Australians who spent their stimulus payments is significantly higher than in the United States, according to new research from The Australian National University.

The study, conducted by ANU economist Professor Andrew Leigh from the Research School of Social Sciences, used results from the most recent ANU Poll, which surveyed a random sample of households.

Forty per cent of those who had received a household stimulus payment said that they had spent it, said Professor Leigh. This is approximately twice as high as the share of United States residents who reported that they spent the tax rebates that were handed out in 2001 and 2008.

On reasonable assumptions, this suggests that a little over 40 percent of the payments had been spent by June 2009.

Professor Leigh cautioned that this is probably an underestimate of the share of stimulus payments that were spent in the long-run.

There are two reasons why the long-run spending rate is likely to have been higher than 40 percent. First, the June survey only looks at the short-term, and misses spending that occurred in the second quarter after the payments were handed out.

Second, the survey approach to estimating the impact of stimulus payments has been shown to get lower estimates than directly measuring household expenditure. (Yet while it would be ideal to have direct measures of spending, such an approach cannot be implemented using publicly available data.)

Comparing across households, spending rates are not strongly related to income, but are significantly related to households' concern about rising government debt (consistent with evidence from the United States).

Intriguingly, Labor voters were much more likely to have spent their payment than Coalition voters - a relationship that remains significant even holding constant income and age.
A copy of the paper, How Much Did the 2009 Fiscal Stimulus Boost Spending? Evidence from a Household Survey, is available at: