Échevin, Damien (2009): Ricardian or Spender Consumers? Evidence from a Taxpayer Survey Questionnaire.
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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.
|Item Type:||MPRA Paper|
|Original Title:||Ricardian or Spender Consumers? Evidence from a Taxpayer Survey Questionnaire|
|Keywords:||income tax cut; consumption; survey questionnaire; PIH; liquidity constraints.|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H31 - Household
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E21 - Consumption; Saving; Wealth
|Depositing User:||Damien Échevin|
|Date Deposited:||22. Dec 2009 07:16|
|Last Modified:||13. Feb 2013 15:15|
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