Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322318 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. 17/2024
Publisher: 
Norges Bank, Oslo
Abstract: 
This paper studies the spending response to news about a dividend tax reform to estimate the elasticity of intertemporal substitution (EIS). The Norwegian dividend tax reform was proposed in 2003, announced in 2004, and implemented in 2006, raising the dividend tax rate by 28 percentage points. We compare the spending responses of exposed households to a control group with no dividend income. Exposed households increased spending after the news and reduced spending after implementation. We show that this behavior is only consistent with an EIS above one. Using a capitalistworker framework, we estimate the EIS to be around 1.6.
Subjects: 
Anticipatory dis-saving
capital income taxation
capitalist-worker model
impulse response matching
JEL: 
D15
E21
H25
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-337-6
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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