Reported Effects versus Revealed-Preference Estimates: Evidence from the Propensity to Spend Tax Rebates
Name
aeri.20180333.pdf
Description
Published version
Size
583.2 KB
Format
Adobe PDF
Checksum (MD5)
da30f010f6517ef52c21635bb4a1540c
Author(s)
Parker, Jonathan A
Souleles, Nicholas S
Date Issued
2019
Journal
American Economic Review: Insights
Publisher
American Economic Association
Citation
Parker, Jonathan A and Souleles, Nicholas S. 2019. "Reported Effects versus Revealed-Preference Estimates: Evidence from the Propensity to Spend Tax Rebates." American Economic Review: Insights, 1 (3).
Version
Final published version
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) and (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 C83, D14, D91, E62, H24, H31)
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/AERI.20180333
