search query: @indexterm taxation / total: 1872
reference: 530 / 1872
| Author: | Souleles, N. |
| Title: | The response of household consumption to income tax refunds |
| Journal: | American Economic Review
1999 : SEP, VOL. 89:4, p. 947-958 |
| Index terms: | ECONOMICS CONSUMPTION TAXATION |
| Language: | eng |
| Abstract: | This paper examines the response of household consumption to a particular type of income that is both predictable and transitory -- income tax refunds. Since a refund depends on events in the previous calendar year, it is predictable income as regards consumption in the year of its receipt. Consequently, under the life-cycle theory, consumption should not increase on receipt of a refund. In addition to testing the canonical model of consumption, this paper provides estimates interpretable as the marginal propensity to consume (MPC) out of refunds. |
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