Reported MPC and Unobserved Heterogeneity

Tullio Jappelli () and Luigi Pistaferri

American Economic Journal: Economic Policy, 2020, vol. 12, issue 4, 275-97

Abstract: Panel data on reported marginal propensity to consume in the 2010 and 2016 Italian Survey of Household Income and Wealth uncover a strong negative relationship between cash on hand and MPC. Even though the relationship is attenuated when using regression methods that control for unobserved heterogeneity, the amount of bias is moderate. MPC estimates are used to evaluate the effectiveness of revenue-neutral fiscal policies targeting different parts of the distribution of household resources.

JEL-codes: E21 E62 G51 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (32)

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Related works:
Working Paper: Reported MPC and Unobserved Heterogeneity (2019)
Working Paper: Reported MPC and Unobserved Heterogeneity (2018)
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DOI: 10.1257/pol.20180420

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