Individual response to different market valuations and benefit changes

<p>This dissertation focuses on how changes in SNAP (Supplemental Nutrition Assistance Program, formerly called food stamp) policies affect the consumption choices for recipient households and how macroeconomic environment affects individuals’ behaviors. In the first chapter, I examine the consumer response to SNAP benefit change. In the second chapter, I examine the investor attention under different stock market valuations. In the third chapter, I examine the impact of rising housing prices on individuals’ marriage entry.</p><p>In the first chapter, we examine how SNAP benefits were spent. The American Recovery and Reinvestment Act of 2009 (commonly known as the Stimulus Act) temporarily increased the benefit level for SNAP recipients and released qualification requirements. We use a consumer panel with detailed transaction records to analyze the impact of SNAP benefits changes on participant household’s consumption choices. We find that the marginal propensity to spend (MPS) on food out of SNAP benefits increase is 0.45. The MPS out of SNAP benefit decrease is -0.85. SNAP participant households are more sensitive toward the benefits decrease than increase. We also study how SNAP benefits spent are in response to benefit changes. We find that with more SNAP benefits recipient households consume much more tobacco and with less benefit they consume much less alcohol. Results are robust to various placebo tests.</p><p>In the second chapter, I examine the impact of stock market valuation on investor attention. Investor attention affects stock return variance and risk premia. Using Google Trend data, I come up with a new proxy for measuring investor attention. This chapter investigates investor attention effect on the merger announcement and how market valuations and days of the week affect investor attention. With the Google search index, this study finds that investor attention has positive correlations on market reactions following the merger announcement.</p><p>In the third chapter, I estimate the impact of increasing on first marriage age in China. The first marriage age plays a very important role in the population economy, especially for a demographic dividend. The marriage market is affected by income, education, wealth inequality, consumption, etc. In China, the first marriage age has fallen since the late 1990s. This chapter focuses on how the price of the apartments change people decisions on marriage and ascribes that part of the delay to first marriage age is due to increase in housing price over the same period. In China, social norms require men to own an apartment before they get married. Based on the empirical evidence of population dynamics, the chapter suggests that a 1% increase in housing price will result in 0.016 years delay in the age of first marriage in China. When the housing price increases too much, it will have an even larger effect on marriage decisions because the high housing price becomes unaffordable for young couples. The result is robust with a wide range of model specifications.</p>