Consumer Response to Tax Rebates

Matthew D. Shapiro and Joel Slemrod ()

No 8672, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many households received income tax rebates in 2001 of $300 or $600. These rebates represented advance payments of the tax cut from the new 10 percent tax bracket. Based on a survey of a representative sample of households, this paper finds that only 22 percent of households receiving the rebate would spent it. Instead, they would either save it or use it to pay off debt. This very low rate of spending represents a striking break with past behavior, which would have suggested a much higher rate of spending. The low spending rate implies that the tax rebate provided a very limited stimulus to aggregate demand.

JEL-codes: E21 E65 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pub
Date: 2001-12
Note: EFG PE
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w8672.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Journal Article: Consumer Response to Tax Rebates (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:8672

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w8672
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().