FinanceandEconomicsDiscussionSeries

FederalReserveBoard,Washington,D.C.

ISSN1936-2854(Print)

ISSN2767-3898(Online)

IntheDriver’sSeat:PandemicFiscalStimulusandLightVehicles

JackDunbar,ChristopherKurz,GengLi,andMariaD.Tito

2024-013

Pleasecitethispaperas:

Dunbar,Jack,ChristopherKurz,GengLi,andMariaD.Tito(2024).“IntheDriver’sSeat:PandemicFiscalStimulusandLightVehicles,”FinanceandEconomicsDiscus-sionSeries2024-013.Washington:BoardofGovernorsoftheFederalReserveSystem,

/10.17016/FEDS.2024.013

.

NOTE:StafworkingpapersintheFinanceandEconomicsDiscussionSeries(FEDS)arepreliminarymaterialscirculatedtostimulatediscussionandcriticalcomment.TheanalysisandconclusionssetfortharethoseoftheauthorsanddonotindicateconcurrencebyothermembersoftheresearchstafortheBoardofGovernors.ReferencesinpublicationstotheFinanceandEconomicsDiscussionSeries(otherthanacknowledgement)shouldbeclearedwiththeauthor(s)toprotectthetentativecharacterofthesepapers.

IntheDriver’sSeat:PandemicFiscalStimulusandLight

Vehicles*

JackDunbar?ChristopherKurz?GengLi§MariaD.Tito?

February27,2024

Abstract

Thispaperexplorestheimpactoftwo?scalprograms,theEconomicImpactPay-mentsandthePaycheckProtectionProgram,onvehiclepurchasesandrelatesour?ndingstopost-pandemicpricepressures.We?ndthatreceivingastimuluscheckincreasedtheprobabilityofpurchasingnewvehicles.Inaddition,thedisbursementoffundsfromthePaycheckProtectionProgramwasassociatedwithariseinlocalnewcarregistrations.Ourestimatesindicatethatthesetwoprogramsaccountforaboostof13/4millionunits—or12percent—tonewcarsalesin2020.Furthermore,thein-ducedboostinsalescoincidedwiththepresenceofsigni?cantproductionconstraintsandexacerbatedaninventorydrawdown,therebycontributingtotherapidincreaseinnewvehiclepricesthatprevailedinthesubsequentyears.

Keywords:DiscretionaryFiscalPolicy,LightVehiclePurchases,In?ation.JELclassi?cation:E21,E31,G31,G51,H24,H31.

*WewouldliketothankTomazCajner,LisaDettling,GlennFollette,JakeOrchard,NickTurner,and

otherFederalReservecolleaguesfortheirinsightfulsuggestionsandcomments.WewouldalsoliketothankMichaelGreenforexcellentresearchassistance.Theviewspresentedinthispaperrepresentthoseoftheau-thorsanddonotnecessarilycoincidewiththoseoftheFederalReserveBoard,theFederalReserveSystem,oritsstaff.

?UniversityofPennsylvania.

?FederalReserveBoard.

§FederalReserveBoard.

?FederalReserveBoard.Correspondingauthor.Contact:

maria.d.tito@.

1

1Introduction

TheCOVID-relatedlockdownsledtoabruptinterruptionstobroadeconomicactivitiesinthesecondquarterof2020.Surprisingly,lightvehiclesalesupontheonsetofthepandemicoutbreakandinsubsequentquartersremainedrelativelyresilient.Thispaperattemptstoexplorethereasonsbehindthisresilienceandrelatesthestrongvehiclesalestosigni?-cantlyhighervehiclepricesconsumersencounteredfollowingthepandemic.Wechoosetofocusonvehicledemandbecauselightvehiclesalestendtobe“highbeta,”thatis,highlyprocyclicalandresponsivetochangesineconomicconditions.Inaddition,themotorve-hiclesectorisanindustryblessedwiththepreponderanceofwell-measuredanddetailed

data.

Onewaytoillustratethepandemicresilienceoflightvehiclesalesistoestimateacoun-terfactuallevelofsalesbasedonthestandardmeasuresofmacroeconomicactivity.Asshownin?gure

1,therealizeddropinvehiclepurchasesduringthesecondquarterof

2020(theblueline)wasfarlesspronouncedthanwhatcouldbepredictedbytheregulardeterminantsofvehiclesales,suchasGDPgrowth,populationgrowth,theunemployment

rate,andgasolineprices(theredline).1

ReplacingGDPwithdisposablepersonalincome(DPI)growththatdoesnotincludethe?scalsupporthouseholdsreceivedduringthistime

predictsanevenlargercontractioninsales(thegreenline)

.2

Indeed,fromtheonsetofthepandemicoutbreakthroughMarch2021,thefederalgov-ernmentenactedseveral?scalpackageswiththepurposeofprovidingeconomicrelieftoconsumers,smallbusinesses,andotherentitiesthathadbeenadverselyaffectedbythepandemic.Such?scalsupportmayhaveboostedautosalesduringaperiodwhendemandwouldotherwisebeevenmoresubdued.Wefocusontwodiscretionary?scalprograms—theEconomicImpactPayments(EIP)andthePaycheckProtectionProgram(PPP)—andevaluatetheirpotentialeffectsonlightvehiclepurchasesusinghousehold-andcounty-leveldata.Inparticular,drawingondatafromtheConsumerExpenditureSurvey(CE)

andonnewcarregistrations,weestimatethatthosetwodiscretionary?scalprograms

1Therelativelymoderatedropinvehiclesaleswasevenmoreremarkableifconsideringsocialdistancingmeasuresthatemergedduringthepandemic,factorsthatarenotcapturedbyourmodelofprojection.

2OurmeasureofdisposableincomeexcludesthesupportfromtheEconomicIncomePayments(EIP),fromthePaycheckProtectionProgram(PPP)aswellasfromtheUnemploymentInsurance(UI).

2

boostedsalesin2020by13/4millionunits.Wethenanalyzetheeffectofresilientsales

onvehicleinventoriesanddetailedvehiclepricesdata,astheboostinsalesmirroredacomparabledeclineininventorylevelsbecauseitoccurredduringaperiodofsigni?cantproductionconstraints.We?ndthatstrongsaleswereassociatedwithanincreaseinvehi-clepricein?ationof1.3percentagepoints(20percent),contributingtotherapidpickupin

pricesthatprevailedoverthefollowingyear.

Ourpaperaddstothevast,unsettledliteraturethatstudiestheeffectsofdiscretionary

?scalpolicyoneconomicactivityandothermacroeconomicvariables.Severalcontributions—

suchas

Auerbach

[2002]and

Taylor

[2011,

2022]—pointtoalargelylimitedstabilization

impactof?scalpolicyinrecentdecades.Moreover,

ShapiroandSlemrod

[2009]and

Or-

chardetal.

[2023]also?ndonlyamodesteffectofthe2008stimuluspaymentsonoverall

spending.Bycontrast,

Parkeretal.

[2013]documentasigni?canteffectofthe2008stim

-uluspaymentsonconsumption,with2/3oftheconsumptionboostmaterializingthrough

vehiclepurchases.

Fiscalstimulus’effectsonvehiclesalesalsoremainanactivedebatewithrespecttotheirmagnitudeanddurability.Ontheonehand,theseminalcontributionby

Mianand

Su?

[2012]suggeststhattheCarAllowanceRebateSystem—aprogramimplementedin

2009thatwasdirectlytargetinglightvehiclesales—ledtoatemporaryboostofsalesthatwasreversedinthefollowingmonths.Ontheotherhand,

Hicksetal.

[2012]pointtoa

somewhatlargereffectwithlittlechangeinpurchasingpatternsfollowingtheendoftheprogram.Finally,

Orchardetal.

[2023]suggestasmallboosttomotorvehicleexpenditures

fromthe2008stimuluspayments.

Ourpaperrevisitsthelinkbetweendiscretionary?scalprogramsandlightvehiclepur-chases,takingadvantageoftheunprecedentedmagnitudeof?scalsupportenactedinre-sponsetothepandemicrecession.Indeed,theliteratureremaininginconclusiveonthisquestionmayre?ecttherelativelymoderatesizesofpreviousstimulusprograms.Theeffectofthe?rstroundofEIPsonconsumptionhasbeenalsoanalyzedby

Parkeretal.

[2022],whichcharacterizestheMPCsforvariousconsumptioncategoriesbyexploiting

thevariationintheamount,thereceipt,andthetimingofreceiptofthe2020stimulus

checks;inparticular,theydocumentanegligibleimpactontransportation,acategorythat

3

mainlyincludespurchasesofvehicles.Whileourpaperseparatelyanalyzesthevarious

roundsofEconomicImpactPayments,itidenti?eswhetherthereceiptofastimuluscheckaltertheprobabilityofpurchasingavehicle,ratherthantheeffectonthethedollarvalue;infact,ouranalysisofunitsislikelytobelessaffectedbyconfoundingfactorsandotherincentivesthat,instead,couldshiftconsumerexpendituretowardsvehiclesofdifferent

values.3

Ourresultssuggestthattheeffectmaterializesthroughadditionalnewandusedvehiclepurchases.Moreimportantly,ourworkaddstwopiecesofnovelevidence.First,wedocumentthatthePPP,aprogramthatprimarilytargetedsmallbusinesses,hadalso

implicationsonhouseholdexpenditures.4

Second,werelyonnovelmicro-leveldataon

prices,sales,andinventorylevelstoinferthein?ationimplicationsofrobustvehiclesales.5

2Data

Thispaperleverageshousehold-levelinformationonconsumervehiclepurchasebehaviorfromtheConsumerExpenditureSurvey(CE),detailedcounty-levelvehiclesalesdatafromR.L.Polk&Co.(Polk),andvehiclemodel-levelsales,inventories,andpricesfromInforma

BusinessMedia,Inc..

TheCEisconductedquarterlybytheBureauofLaborStatisticsandcollectsdetailedin-formationonU.S.householdexpendituresinadditiontosocioeconomicanddemographiccharacteristics.Inparticular,theCEcollectsinformationonvehiclepurchasesand,impor-

tantly,thereceiptof?scalstimuluschecks.

Motorvehiclepurchasesre?ectedintheCEdataarebroadlyconsistentwiththeaggre-gatesalesdata.Forexample,asshownin?gure

2,thenumberofnewvehicleoutlaysfrom

thesurvey(inblue)tracksthetrendinthePolkdataonretailpurchases(inblack)well,

thoughthelevelissomewhatlower.6

3Forexample,

Hoekstraetal.

[2017]documentthattheCarAllowanceRebateSystemshiftedpurchases

towardslessexpensivecars,whichwerealsofuelef?cient.

4MostoftheliteratureonthePPPexploresitslabormarketimplications.See,forexample,

Autoretal.

[2022a]and

Autoretal.

[2022b]

.

5Orchardetal.

[2023]alsocharacterizedthepriceimplicationsassociatedwiththe2008stimuluschecks,

buttheyrelyonaggregatepricedata.Theimpliedeffecttheydocumentissmallercomparedtoours;the

differenceislikelytheresultofsigni?cantlymoresevereproductionconstraintsin2020and2021relativetothoseduringtheGreatRecession.

6WeusetheCEsurveyweightstoestimatetheaggregatesales.Therehavebeenseveralpapers(see,

4

ThevehiclepricesintheCEdataarealsoconsistentwithnationaltrends.Asseenin

?gure

3,theaveragenewvehiclepricesfromthesurvey(thedarkblueline)followsthe

trendintheJ.D.PowerandAssociates(JDPower)averagenewtransactionprice(thelight

blueline)closely.

Ouranalysisalsotakesadvantageofregistrationdata.Whenanautoorlighttruck

ispurchased,itiseventuallyregisteredwiththestateinwhichownershipoccurs.7

Polkcollectsregistrationdatafromeachstateatthezipcodeandcountylevel,anditrecords

informationonregistrationtype(personal/business/lease).8

WelinkdataonPPPloanstosmall?rmstothecountyregistrationinformationfromPolktoexplorethepotentialeffectofPPPonvehiclesales.ThePPPloandatasourcefromtheSmallBusinessAdministration

andareaggregateduptothecountylevel.9

Inaddition,InformaBusinessMedia,Inc.collectsdetailedmakeandmodel-leveldataonprices,inventories,andsales.Thesalesandinventoriesaremonthlydata,whileprices(speci?cally,manufacturer’ssuggestedretailpricesorMSRPs)areavailableatanannualfrequency.Eachseriescontainsinformationonvehiclemakeandmodel.Usingthesedata,weexplorethepotentialeffectofrobustsalesduringaperiodofvehicleproduction

constraintsonsubsequentpriceincreases.

3EmpiricalAnalysis

WenowanalyzehowvehicledemandrespondedtoEIPstimuluschecksandthePPPloanprogram.Ourestimatessuggestthatthesetwoprogramstogetherboostedsalesby13/4

millionunitsandcontributedtothepricepressuresinthemotorvehiclemarket.

amongothers,

Battistin,

2003;

Passeroetal.,

2014)thathavedocumentedCEtendstounderestimateaggre

-gatedexpenditures,suchasthoseintheNationalIncomeandProductAccounts.Thesurveyalsocollectsdataonusedvehicles,whichwewillbeusinginouranalysis.

7Afterpurchasinganeworusedvehicle,statelawrequiresthatthevehicleberegisteredatthestate’sdepartmentofmotorvehicleswithin30days.

8Thisinformationhasbeenusedinseveralpapers,including

MianandSu?

[2012]

9ThePPPdataareavailableat

/dataset/ppp-foia

.

5

3.1EconomicImpactPayments

BetweenMarch2020andMarch2021,thefederalgovernmentenactedthree?scalpackagesthatestablisheddirectpaymentstoeligibleindividuals.Thosepayments—–rangingfrom$600to$1400forindividualsorfrom$1200to$2800formarriedcouplesjointly?ling,plusanadditional$500to$1400foreachqualifyingdependent—–werebroadlyavailabletoindividualswithincomesbelowspeci?cthresholdsandwerephasedoutbeyondthose

thresholds.10

Acrossthethreewavesandallrecipients,thetotal?scalstimulustotaled

$837.5billion,aheretoforeunprecedented?scalsupport.

TheCEdatacoveralargeportionoftheEIPprogram,withanestimatedaggregateamountofstimuluscheckpaymentsnear$600billion.Finally,thetimingoftransfers(Fig-ure

4)andthesizeofstimuluspaymentsforthemedianhouseholdandthoseatthe25th

and75thpercentile(Figure

5)arebroadlyconsistentwiththeof?cialdata.

Howdidhouseholdsusethestimuluschecks?AccordingtotheCEsurvey,upto60percentofhouseholdsmostlyusedthissizableincomesupplementtoincreasespending,whilesmallersharesreportedpayingdowndebtoraddingtosavings.Figure

6

plotsproportionofthethreeusesofthestimuluschecks(alongwiththefractionofmissingresponses).Thepropensitytospendstimulusfunds,whichappearstobesomewhatlargerthanwhatwasreportedintheHouseholdPulseSurvey,declinedslightlyforlaterwaves

ofpayments.11

Toevaluatehowthestimuluschecksmayhaveboostedhouseholdvehicledemand,we

estimatealinearprobabilitymodelthatrelateswhetherahouseholdpurchasedacarwith

10Speci?cally,thestimuluspaymentswereinitiallyavailabletoindividualswithadjustedgrossincome(AGI)upto$75,000,headofhousehold?lerswithAGIupto$112,500,ormarriedcouples?lingjointlywithAGIupto$150,000;stimuluspaymentsweregraduallyphased-outabovethosethresholds.Inlaterwaves,thephase-outcriteriaweretightened.

11AccordingtotheCensusBureau’sHouseholdPulseSurvey,upto20percentofhouseholdsusedthestimuluscheckstoincreasespendingwiththelargemajorityreportingpayingdowndebt.Otherworkdoc-umentedthedirectallocationofthestimulusfund.Forexample,

Coibionetal.

[2020]and

Armantieretal.

[2020]estimatethatforWave1directstimulusallocations,householdsspentabout30to40percent,saved

about30to35percent,andpaiddowndebtwithabout30to35percent.

Armantieretal.

[2021]furtherin

-dicatethathouseholdsplannedtospendlessoftheirWave2andWave3?scalstimuluspayments,insteadfocusingmoreonsavinganddebtreduction.

6

thereceiptofstimulusfunds,

yit,t+1=a+β·Stimulusit+gXit+εit(1)

whereyit,t+1isequalto1forhouseholdipurchasingacarinquartertort+1,Stimulusitisadummythatindicateswhetherthehouseholdreceivedastimuluscheck,andXitdenotes

anarrayofdemographicandincomecharacteristics.12

Multipleroundsofstimuluschecksweremailedtohouseholdsinboth2020and2021,butahouseholdonlyremainsintheCEsampleforatmostfourconsecutivequarters.Asaresult,wefocusontwocohortsofCEhouseholdstoassessthepotentialboosttovehiclesalesrelatedtothesestimuluschecks.Wekeeponlythehouseholdsthathaveparticipatedinallfourquarterlysurveysinoursample.The?rstwaveofhouseholdsstartedthesurveyineitherthe?rstorthesecondquarterof2020.Wecorrelatetheirreportedstatusofreceiv-ingstimuluscheckbetweenAprilandJulywiththeirnewvehiclepurchasesduringthesecondandthirdquarterofthatyear.Thesecondwaveofhouseholdsstartedthesurveyineitherthe?rstorthesecondquarterof2021.Forthesehouseholds,wecorrelatetheirreceivingstimuluschecksbetweenDecember2020andMay2021withtheirnewvehicle

purchasesinthe?rstandthesecondquarterof2021

.13

Theidenti?cationofβ,ourcoef?cientofinterest,reliesonthecross-sectionalvariationacrosshouseholdsregardingthereceiptofstimuluschecksandtheirvehiclepurchasingbehavior.Indeed,theCEsampledisplaysvariabilityinthereceiptofstimulusfundsacrosshouseholds,evenbelowtheincomethresholdsatwhichhouseholdswereeligibleforthepayments.Inparticular,we?ndthatonlyaround75percentofhouseholdswithincomebelow$75,000reportedtohavereceivedthe?rststimuluschecksin2020andonlyaround85percentreportedhavingreceivedthesecondcheckin2021.Bycontrast,accordingto

theprogram,allhouseholdsinthisgroupshouldhavereceivedthosechecksaroundthose

12Speci?cally,wecontrolforafter-taxincome(inlog-s),adummyifincomehasbeentop-coded,thesizeofthehousehold,andvariousobservables(age,race,gender,education,maritalstatus)fortheheadofthehouseholdineachwave.

13Thereweretworoundsofstimuluschecksmailedduringthistime.The?rstroundwasprimarilydis-tributedbetweenlateDecembertolateJanuary,withmostindividualsreceiving$600.ThesecondroundwasprimarilydistributedbetweenMarchandMay,withmostindividualsreceiving$1,400.Becausetheywere

distributedwithlittletimeapart,wedonotseparatelyassesstherespectivepotentialvehiclesalesboost.

7

timelinesirrespectiveofotherfamilycharacteristics.

Wearguethattwofactorsmayhelpaccountforthisdiscrepancy.First,asreportedbytheGovernmentAccountabilityOf?ce

2002,“[N]on[tax]?lers,?rst-time?lers,un

-banked/underbanked,mixedimmigrantstatusfamilies,thosewithlimitedinternetac-cess,andthoseexperiencinghomelessnesswerelikelytoexperiencedif?cultieswithre-ceivingtimelypayments.”Infact,membersofthisgroup,whiletheydidnot?letaxre-turnsin2018or2019,werestillrequiredto?leaformwiththeIRSbyNovember21,2020toreceivethestimulusin2020,orto?lea2020taxreturnin2021toreceiveitin2021.Inaddition,householdsmayhavenotcorrectlyreportedthereceiptofstimulusfundsinthesurvey.Thelatterfactorwouldimplythatthestimulusvariableismeasuredwithsomeer-ror,biasingusagainst?ndinganyeffect.However,ourresultsarenotsolelytheoutcomeofreportingerrors:infact,afalsi?cationexercisethatassignsa“stimulustreatment”tohouseholdswithincomebelow$75,000,reportedintable

A1,suggestsahigherpropensity

topurchaseavehicleonlyinthepost-pandemicperiod.Accordingly,ourestimatescanbe

interpretedaslowerboundsofthetrueeffects.

OLSestimatesofmodel(1)arereportedintable1.Columns1–3lookatthe2020wave,whilecolumns4-6reporttheresultsforthe2021waves.We?ndthatreceivingastimu-luscheckgenerallyboostedtheprobabilityofpurchasingacar.Inparticular,duringthe?rstwave,receivingthestimuluschecksincreasedtheprobabilityofpurchasingacarby3.9percentagepoints,aneffectthatisbothstatisticallyandeconomicallysigni?cant.InourCEsample,11.4percentofindividualsthatreceivedastimuluscheckpurchased,onaverage,avehicleovertwoconsecutivequarters.Thus,ourestimatesuggeststhatthestimuluschecksareassociatedwithaone-thirdboostofthevehicle-purchaselikelihood.Movingtocolumns(2)and(3),weestimatethelikelihoodofpurchasingnewandusedcarsseparately.We?ndthat,whilethecoef?cientestimateisslightlylargerforusedcarpurchases,theybothimplyafairlysimilarboosttothevehicle-purchaseprobability:a40

percentincreasefornewvehiclebuyersvs.aone-thirdboostforusedcarpurchases.14

Duringthe2021stimuluswaves,receivingastimuluscheckcontinuestobeassociated

14Inoursample,4.1percentofhouseholdswhoreceiveda2020stimuluscheckboughtanewcar,onav-erage,over2020q2-2020q3,and7.8percentofhouseholdswhoreceiveda2020stimuluscheckboughtausedcarduringthesameperiod.

8

withanincreaseintheprobabilityofpurchasingavehicle(column4),withaneffectmate-rializingonlythroughusedcarpurchase(column6),whilethecoef?cientonnewvehiclepurchasesisinsigni?cant,althoughwithanegativesign(column5).Thefactthatthebulkoftheeffectofthe2021stimuluschecksoccurredthroughused—ratherthannew—vehiclepurchasesisconsistentwiththeemergenceofsigni?cantproductionconstraintsinearly2021.Indeed,asnewvehicleavailabilityquicklydeteriorated,demandforusedvehicles

soared,andvehicleshoppersweremorelikelytoexitthenewvehiclemarket.15

ToquantifytheimpactoftheEIPonsales,weconsiderthecounterfactualofvehiclepurchaseshadthatprogramnotbeenimplemented:withabout70percentofhouseholdsinoursamplehavingreceivedastimuluscheck,ourestimatessuggestthatnewretailve-hiclessaleswouldhavebeenlowercumulativelybyabout11/4millionunitsin2020,an

effectthatappearstohavebeenfairlyshort-lived.16

Inotherwords,ourestimateaccountsforatleast40percentofthedifferencebetweenrealizednewvehiclesalesandthepredic-

tionsofourheuristicmodelsreportedin?gure1

.17

3.2PaycheckProtectionProgram(PPP)

ThePaycheckProtectionProgramprovidedforgivableloanstosmall?rmsandwases-tablishedundertheCoronavirusAid,Relief,andEconomicSecurityActof2020(CARES).Roughly12millionloansofnearly800billiondollarsweremadeduringthePPPprogram’s

lifecycle,whichlastedfromApril2020untilMarchof2021.18

TheaverageloanpublishedbytheSmallBusinessAdministration(SBA),mostofwhichweresubsequentlyforgiven,was68thousanddollars,withtheloanamountvaryingsubstantivelybasedonthetypeof

lenderandtheindustryoftherecipient.Forexample,in2021aPPPrecipientinmining

15AccordingtoconsumerresearchpublishedbyKelleyBlueBookinMay2021,37percentofshoppersplannedtopostponetheirpurchase.Furthermore,amongthosethatremainedin-market,23percentwereconsideringashiftfromnewtoused.Inthesubsequentwave,publishedinSeptember2021,thosepercent-ageshadrisento48percentand38percent,respectively.

16AccordingtothePolkdata,newretailvehiclepurchaseswere4.4millionunitsover2020q2and2020q3.Inourcounterfactual,iftherecipientsofstimuluschecksdidnotseeanincreaseinthecorrespondingprob-abilityofpurchasinganewcar,thatwouldtranslateinto4.4*(0.017/0.041)*0.7=1.26millionunitslessoverthosetwoquarters,as70percentofthesamplereceivedthe?rstroundEIPchecks.

17Whilesalesreached11.2millionunitsinQ2,ourmodelspredictsaleswouldhavereachedbetween8.3and9.8millionunitsinthatquarter,thussuggestinganadditionaldropbetween11/2and3millionunits.

18SeeU.S.SmallBusinessAssociationat

/funding-programs/loans/covid-19-relief

-options/paycheck-protection-programforinformationontheprogramandtherelateddata.

9

sectorreceivedanaverageloanof110thousanddollarsinPPPfundswhilea?rminthe

agricultureandforestrysectorreceivedadisbursementofroughly20thousanddollars.

Giventhatthemajorityof?rmsaresmall?rms,thecoverageoforganizations—andhenceowners—byPPPwasquiteextensive.Indeed,

Deckeretal.

[2021]?ndthatPPP

-

eligible?rmsandentitiesaccountforroughly60percentofprivatepayrollemployment.19

Accordingly,thepossibleimplicationsofPPP-loandisbursementonconsumerbehavior,eitherdirectlythroughbusinessownerpurchasesorindirectlythroughcontinuedemploy-

mentfundedbytheprogramcouldbesubstantial.

WhilewedonothaveaccesstodatathatlinksthereceiptofPPPfundswithindividual-leveloutcomes,acutofthehouseholdexpendituredatabytypeofemployerfortheheadofhouseholdpointstoaninterestingpattern.Asshownintable

2,theprobabilityofvehi

-clepurchasesinhouseholdsthereferencepersonofwhichwasself-employedsigni?cantly

increasedafterthepandemicrelativetothe2017-2019period.20

Thechangeinvehiclepurchasingbehaviorappearslargelydrivenbynewcarpurchases,withtheprobabilityrisingto2.2percentinthepost-pandemicfrom1.3percent,althoughtheprobabilityof

purchasingausedvehiclealsoedgesupbetweenthetwoperiods.21

Bycontrast,house-holdsworkinginprivatecompanies,inthefederal,state,orlocalgovernment,orina

familybusiness,experiencedalowerprobabilityofpurchasingavehicle.

ToinvestigatewhetherPPPboostedlightvehiclesales,ashintedbythepatternintheCEoccupationdata,wemergeloandatafromtheSmallBusinessAdministration,aggre-

gatedatthecountylevel,withdataontheuniverseofnewvehicleregistrations.22

OuranalysisfocusesontheApriltoDecember2020period,thetimewhenissuedPPP

loanswereuntargeted.23

Speci?cally,wecorrelate(log)changesincounty-levelper-capita

19ToqualifyforPPPloanforgiveness,businesseshadtospendthefundsonspeci?celigibleex-

penses—primarily,employeepaychecks.Formoredetailsandathoroughanalysisoftheimpactofthepro-gram,see

Autoretal.

[2022a],who?ndPPPhadamaterialeffect,boostingJune2020payrollemploymentby

about2.3million.

20Accordingto

Autoretal.

[2022a],non-employerbusinesses,agroupthatincludestheself-employed,

received$43billionintheinitialPPPtranches.

21Whileaself-employmentindicatorisastrongpredictorofvehiclepurchases,addingthatcontrolto

model(1)doesnotchangetheresultsdiscussedintheprevioussection.

22MonthlyregistrationdatafromPolkandthesalesdatafromInformaBusinessMedia,Inc.alignalmostper