Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171055
Authors: 
Almunia, Miguel
Lockwood, Benjamin
Scharf, Kimberley Ann
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6591
Abstract: 
This paper estimates the tax-price elasticity of giving using UK administrative tax return data, exploiting variation from a large tax reform. We estimate both the intensive and extensive-margin elasticity, using a novel instrumental variables strategy. Then, we derive new conditions to evaluate the welfare consequences of changes in the generosity of the subsidy to donations. We find a small intensive-margin elasticity of -0.2 and a substantial extensive-margin elasticity of -0.8, yielding a total elasticity of about -1. These estimates mask considerable heterogeneity: high-income individuals respond more on the intensive margin, while the extensive-margin response is stronger among low-income taxpayers.
Subjects: 
tax policy
charitable giving
JEL: 
H24
H31
D64
Document Type: 
Working Paper

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