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The Elasticity of Taxable Income: A Meta-Regression Analysis

Carina Neisser ()
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Carina Neisser: ZEW

No 11958, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The elasticities of taxable and broad income are key parameters in tax policy analysis. To examine the large variation in estimates found in the literature, I conduct a comprehensive meta-regression analysis using information from 51 studies containing 1,448 estimates. Heterogeneity in reported estimates is driven by regression techniques, sample restrictions and variations across countries and time. Moreover, I provide descriptive evidence of the correlation between contextual factors and the magnitude of an elasticity estimate. Selective reporting bias is prevalent in the literature and the direction of reporting bias depends on whether or not deductions are included in the tax base.

Keywords: elasticity of taxable income; income tax; behavioural response; meta-regression; analysis (search for similar items in EconPapers)
JEL-codes: C81 H24 H26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2018-11
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