Tax Policy and Consumer Spending: Evidence from Japanese Fiscal Experiments / Katsunori Watanabe, Takayuki Watanabe, Tsutomu Watanabe.

Format:

Book

Author/Creator:

Watanabe, Katsunori.

Contributor:

National Bureau of Economic Research.

Watanabe, Takayuki.

Watanabe, Tsutomu.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7252.

NBER working paper series no. w7252

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Tax Policy and Consumer Spending

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

This paper studies the extent to which the impact of tax policy on consumer spending differs between temporary and permanent, as well as anticipated and unanticipated tax changes. To discriminate between them, we use institutional information such as legal distinction between temporary and permanent tax changes, as well as timing of policy announcement and implementation. We find that the impact of temporary changes is significantly smaller than the impact of permanent changes. We also find that more than 80 per cent of Japanese consumers, including those who distinguish between temporary and permanent tax changes, respond to tax changes at the time of their implementation and not at the time of a policy announcement. We suggest an interpretation that these consumers follow a near-rational decision rule.

Notes:

Print version record

July 1999.