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Public transportation, fare policies and tax salience

María Cervini-Plá, Mariona Tomàs and Javier Vázquez-Grenno ()
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Javier Vázquez-Grenno: Universitat de Barcelona and IEB

No 2022/05, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: This paper empirically tests whether property owners react to the salience of taxes in terms of their consumption of public services. Exploiting a policy change that reduced fares on public transport in various municipalities of the metropolitan area of Barcelona, we find that salience of the tax to finance the fare reduction increases the consumption of public transportation. Our empirical findings support the hypothesis that the salience of taxes may affect the consumption behavior of taxpayers and our main results contribute to previous empirical evidence relating tax salience and consumption behavior regarding public services.

Keywords: Tax salience; Public transportation; Fare policy (search for similar items in EconPapers)
JEL-codes: D12 H24 R41 R48 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2022
New Economics Papers: this item is included in nep-pbe, nep-tre and nep-ure
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