Munich Personal RePEc Archive

Ricardian or Spender Consumers? Evidence from a Taxpayer Survey Questionnaire

Échevin, Damien (2009): Ricardian or Spender Consumers? Evidence from a Taxpayer Survey Questionnaire.

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_19496.pdf

Download (121Kb) | Preview

Abstract

This paper uses a unique survey questionnaire to assess the impact of the 2002 French tax cut on consumption. I find that the proportion of "spender" consumers as opposed to "Ricardian" consumers is relatively high, with 52.7 per cent of the households declaring that they consume their tax cuts. I also find evidence that the average marginal propensity to consume tax cuts (76.5%) is significantly greater than the average marginal propensity to consume temporary rises in earnings (42.4%). This result is consistent with the PIH. Furthermore, the smaller the tax cut, the greater this gap; and the higher the family earnings, the higher the marginal propensity to consume tax cuts, which invalidates the effect of liquidity constraints on consumption in that context.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.