Reported Effects vs. Revealed-Preference Estimates: Evidence from the propensity to spend tax rebates

Jonathan Parker and Nicholas Souleles

No 23920, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We evaluate the consistency of two methods for estimating the effect of an economic policy: i) asking people how the policy caused them to change their behavior (reported effects); ii) inferring this change using data on behavior and differences in treatment across people (revealed-preference estimates). Both methods are widely used to measure spending caused by increases in liquidity. Using Federal stimulus payments disbursed quasi-randomly in 2008, we find larger revealed-preference estimates of spending propensities for households who report greater spending responses, and the methods produce similar average propensities. But evidence is mixed on the relationship between spending propensities and liquidity.

JEL-codes: B40 C42 D14 E21 E62 H31 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-upt
Note: AP CF EFG ME PE
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Citations: View citations in EconPapers (18)

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