David Frisvold, Phuong Nguyen-Hoang, Christopher K. Odinet
{"title":"Local Cash Transfers and Household Debt: Evidence From Johnson County's Direct Assistance Program","authors":"David Frisvold, Phuong Nguyen-Hoang, Christopher K. Odinet","doi":"10.1111/joca.70076","DOIUrl":null,"url":null,"abstract":"<p>Using administrative credit report data, we examine how recipients of an unconditional, unrestricted cash transfer program in Johnson County, Iowa used their one-time $1400 payment for debt-related purposes. Unlike previous studies of federal stimulus payments where recipients primarily used the funds to reduce existing debt, we find that DAP recipients took on additional housing and auto debt. Specifically, the assistance significantly increased total debt by $2060 (10% above mean), with the largest increases being in mortgage debt ($1129) and auto debt ($435). These effects appeared immediately after recipients cashed their checks and lasted for 9 months. This study provides insights into how unrestricted local cash transfers affect recipients' debt management decisions.</p>","PeriodicalId":47976,"journal":{"name":"Journal of Consumer Affairs","volume":"60 3","pages":""},"PeriodicalIF":3.4000,"publicationDate":"2026-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/joca.70076","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Consumer Affairs","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/joca.70076","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0
Abstract
Using administrative credit report data, we examine how recipients of an unconditional, unrestricted cash transfer program in Johnson County, Iowa used their one-time $1400 payment for debt-related purposes. Unlike previous studies of federal stimulus payments where recipients primarily used the funds to reduce existing debt, we find that DAP recipients took on additional housing and auto debt. Specifically, the assistance significantly increased total debt by $2060 (10% above mean), with the largest increases being in mortgage debt ($1129) and auto debt ($435). These effects appeared immediately after recipients cashed their checks and lasted for 9 months. This study provides insights into how unrestricted local cash transfers affect recipients' debt management decisions.
期刊介绍：
The ISI impact score of Journal of Consumer Affairs now places it among the leading business journals and one of the top handful of marketing- related publications. The immediacy index score, showing how swiftly the published studies are cited or applied in other publications, places JCA seventh of those same 77 journals. More importantly, in these difficult economic times, JCA is the leading journal whose focus for over four decades has been on the interests of consumers in the marketplace. With the journal"s origins in the consumer movement and consumer protection concerns, the focus for papers in terms of both research questions and implications must involve the consumer"s interest and topics must be addressed from the consumers point of view.
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