Panel data on reported marginal propensity to consume (MPC) in the 2010 and 2016 Italy’s Survey of Household Income and Wealth uncover a strong negative relationship between cash-on-hand and MPC. Even though the relationship is attenuated when using regression methods that control for unobserved heterogeneity, the amount of bias is moderate. MPC estimates are used to evaluate the effectiveness of revenue-neutral fiscal policies targeting different parts of the distribution of household resources.
Reported MPC and unobserved heterogeneity / Jappelli, Tullio; Pistaferri, Luigi. - In: AMERICAN ECONOMIC JOURNAL. ECONOMIC POLICY. - ISSN 1945-774X. - 12:4(2020), pp. 275-297.
Reported MPC and unobserved heterogeneity
Tullio Jappelli;
2020
Abstract
Panel data on reported marginal propensity to consume (MPC) in the 2010 and 2016 Italy’s Survey of Household Income and Wealth uncover a strong negative relationship between cash-on-hand and MPC. Even though the relationship is attenuated when using regression methods that control for unobserved heterogeneity, the amount of bias is moderate. MPC estimates are used to evaluate the effectiveness of revenue-neutral fiscal policies targeting different parts of the distribution of household resources.| File | Dimensione | Formato | |
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