Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25536 
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dc.contributor.authorLusardi, Annamariaen
dc.contributor.authorMitchell, Olivia S.en
dc.date.accessioned2008-03-12-
dc.date.accessioned2009-07-24T13:48:36Z-
dc.date.available2009-07-24T13:48:36Z-
dc.date.issued2007-
dc.identifier.piurn:nbn:de:hebis:30-52350en
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
dc.language.isoengen
dc.publisher|aGoethe University Frankfurt, Center for Financial Studies (CFS) |cFrankfurt a. M.en
dc.relation.ispartofseries|aCFS Working Paper |x2008/01en
dc.subject.jelD91en
dc.subject.jelE21en
dc.subject.jelE51en
dc.subject.jelE62en
dc.subject.jelG2en
dc.subject.jelH31en
dc.subject.ddc330en
dc.subject.keywordConsumptionen
dc.subject.keywordSavingen
dc.subject.keywordLife-Cycle Modelen
dc.subject.keywordPermanent-Income Hypothesisen
dc.subject.keywordLiquidity Constraintsen
dc.subject.keywordFiscal Policyen
dc.subject.keywordTax Cutsen
dc.subject.keywordTax Rebatesen
dc.subject.keywordWindfallsen
dc.subject.keywordCredit Cardsen
dc.subject.keywordConsumer Crediten
dc.subject.keywordConsumer Balance Sheetsen
dc.subject.keywordHousehold Financeen
dc.subject.stwVerbraucherausgabenen
dc.subject.stwKreditkarteen
dc.subject.stwKonsumentenverhaltenen
dc.subject.stwEinkommensteueren
dc.subject.stwSteuerbegünstigungen
dc.subject.stwSteuerwirkungen
dc.subject.stwEinkommenshypotheseen
dc.subject.stwUSAen
dc.titleThe reaction of consumer spending and debt to tax rebates: Evidence from consumer credit data-
dc.typeWorking Paperen
dc.identifier.ppn559757492en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:zbw:cfswop:200801en

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