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Discussion Papers in Economics, Woodrow Wilson School of Public and International Affairs (WWS), Princeton University  >

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dc.contributor.authorJohnson, David S.en_US
dc.contributor.authorParker, Jonathan A.en_US
dc.contributor.authorSouleles, Nicholas S.en_US
dc.date.accessioned2009-01-29T16:07:17Z-
dc.date.available2009-01-29T16:07:17Z-
dc.date.issued2004en_US
dc.identifier.urihttp://hdl.handle.net/10419/23458-
dc.description.abstractUnder the Economic Growth and Tax Relief Reconciliation Act of 2001, most U.S. taxpayers received a tax rebate between July and September, 2001. The week in which the rebate was mailed was based on the second-to-last digit of the taxpayer's Social Security number, a digit that is effectively randomly assigned. Using special questions about the rebates added to the Consumer Expenditure Survey, we exploit this historically unique experiment to measure the change in consumption expenditures caused by receipt of the rebate and to test the Permanent Income Hypothesis and related models. We find that households spent about 20-40 percent of their rebates on non-durable goods during the three-month period in which their rebates were received, and roughly another third of their rebates during the subsequent three-month period. The implied effects on aggregate consumption demand are significant. The estimated responses are largest for households with relatively low liquid wealth and low income, consistent with liquidity constraints.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesDiscussion papers in economics / Princeton University, Woodrow Wilson School of Public and International Affairs 231en_US
dc.subject.jelE21en_US
dc.subject.jelH31en_US
dc.subject.jelE62en_US
dc.subject.ddc330en_US
dc.subject.keywordconsumptionen_US
dc.subject.keywordsavingen_US
dc.subject.keywordLife-Cycle modelen_US
dc.subject.keywordPermanent-Income Hypothesisen_US
dc.subject.keywordliquidity constraints ; fiscal policyen_US
dc.subject.keywordtax cutsen_US
dc.subject.keywordtax rebatesen_US
dc.subject.keywordwindfallsen_US
dc.subject.stwEinkommensteueren_US
dc.subject.stwSteuerbeg├╝nstigungen_US
dc.subject.stwVerbraucherausgabenen_US
dc.subject.stwUSAen_US
dc.titleHousehold Expenditure and the Income Tax Rebates of 2001en_US
dc.typeWorking Paperen_US
dc.identifier.ppn50401725Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Discussion Papers in Economics, Woodrow Wilson School of Public and International Affairs (WWS), Princeton University

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