Estimating Marginal Propensities to Consume in Australia Using Micro Data

Laura Berger-Thomson, Elaine Chung and Rebecca McKibbin
Additional contact information
Laura Berger-Thomson: Reserve Bank of Australia
Elaine Chung: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: This paper uses micro data from the Household, Income and Labour Dynamics in Australia Survey to estimate the marginal propensity to consume. Estimates are made by examining two types of policy changes – to income tax rates and lump-sum transfers – which help to identify the effect of shocks to income on consumption. A standard Euler equation for consumption is used to analyse the effect of income tax changes. The marginal propensity to consume out of lump-sum transfers is estimated using fixed effects and propensity score matching. In addition, the paper examines differences in the marginal propensity to consume across households according to measures of liquidity constraints and unemployment risks.

Keywords: marginal propensity to consume; panel data; HILDA (search for similar items in EconPapers)
JEL-codes: C23 D12 H31 (search for similar items in EconPapers)
Date: 2009-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/2009/pdf/rdp2009-07.pdf (application/pdf)

Related works:
Journal Article: Estimating Marginal Propensities to Consume in Australia Using Micro Data (2010)
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: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2009-07

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew ().