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dc.contributor.authorLusardi, Annamariaen_US
dc.contributor.authorMitchell, Olivia S.en_US
dc.date.accessioned2008-03-12en_US
dc.date.accessioned2009-07-24T13:48:36Z-
dc.date.available2009-07-24T13:48:36Z-
dc.date.issued2007en_US
dc.identifier.piurn:nbn:de:hebis:30-52350-
dc.identifier.urihttp://hdl.handle.net/10419/25536-
dc.description.abstractWe use a new panel dataset of credit card accounts to analyze how consumer responded to the 2001 Federal income tax rebates. We estimate the monthly response of credit card payments, spending, and debt, exploiting the unique, randomized timing of the rebate disbursement. We find that, on average, consumers initially saved some of the rebate, by increasing their credit card payments and thereby paying down debt. But soon afterwards their spending increased, counter to the canonical Permanent-Income model. Spending rose most for consumers who were initially most likely to be liquidity constrained, whereas debt declined most (so saving rose most) for unconstrained consumers. More generally, the results suggest that there can be important dynamics in consumers’ response to “lumpy” increases in income like tax rebates, working in part through balance sheet (liquidity) mechanisms.en_US
dc.language.isoengen_US
dc.publisherCenter for Financial Studies Frankfurt, Mainen_US
dc.relation.ispartofseriesCFS Working Paper 2008/01en_US
dc.subject.jelD91en_US
dc.subject.jelE21en_US
dc.subject.jelE51en_US
dc.subject.jelE62en_US
dc.subject.jelG2en_US
dc.subject.jelH31en_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 Constraintsen_US
dc.subject.keywordFiscal Policyen_US
dc.subject.keywordTax Cutsen_US
dc.subject.keywordTax Rebatesen_US
dc.subject.keywordWindfallsen_US
dc.subject.keywordCredit Cardsen_US
dc.subject.keywordConsumer Crediten_US
dc.subject.keywordConsumer Balance Sheetsen_US
dc.subject.keywordHousehold Financeen_US
dc.subject.stwVerbraucherausgabenen_US
dc.subject.stwKreditkarteen_US
dc.subject.stwKonsumentenverhaltenen_US
dc.subject.stwEinkommensteueren_US
dc.subject.stwSteuerbegünstigungen_US
dc.subject.stwSteuerwirkungen_US
dc.subject.stwEinkommenshypotheseen_US
dc.subject.stwUSAen_US
dc.titleThe reaction of consumer spending and debt to tax rebates: Evidence from consumer credit dataen_US
dc.typeWorking Paperen_US
dc.identifier.ppn559757492en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:cfswop:200801-
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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