Salience and Taxation: Theory and Evidence
TLDR
In this article, the authors show that consumers underreact to taxes that are not salient, and that even policies that induce no change in behavior can create efficiency losses, implying that the economic incidence of a tax depends on its statutory incidence.Abstract:
Using two strategies, we show that consumers underreact to taxes that are not salient. First, using a field experiment in a grocery store, we find that posting tax-inclusive price tags reduces demand by 8 percent. Second, increases in taxes included in posted prices reduce alcohol consumption more than increases in taxes applied at the register. We develop a theoretical framework for applied welfare analysis that accommodates salience effects and other optimization failures. The simple formulas we derive imply that the economic incidence of a tax depends on its statutory incidence, and that even policies that induce no change in behavior can create efficiency losses. ( JEL C93, D12, H25, H71)read more
Citations
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Recent developments in the econometrics of program evaluation
TL;DR: In the last two decades, much research has been done on the econometric and statistical analysis of such causal effects as discussed by the authors, which has reached a level of maturity that makes it an important tool in many areas of empirical research in economics, including labor economics, public finance, development economics, industrial organization, and other areas in empirical microeconomics.
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Social Norms and Energy Conservation
Hunt Allcott,Hunt Allcott +1 more
TL;DR: In this paper, a series of programs run by a company called OPOWER to send Home Energy Report letters to residential utility customers comparing their electricity use to that of their neighbors is evaluated.
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Unobservable Selection and Coefficient Stability: Theory and Evidence
TL;DR: This article developed an extension of the theory that connects bias explicitly to coefficient stability and showed that it is necessary to take into account coefficient and R-squared movements, and showed two validation exercises and discuss application to the economics literature.
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Psychology and Economics: Evidence from the Field
TL;DR: The authors survey the empirical evidence from the field on three classes of deviations from the standard model: nonstandard prefer- ences, nonstandard beliefs, and nonstandard decision making, and present evidence on overcon- fidence, on the law of small numbers and on projection bias.
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The short-run and long-run effects of behavioral interventions: Experimental evidence from energy conservation
Hunt Allcott,Todd Rogers +1 more
TL;DR: In this paper, the authors show that initial reports cause high-frequency "action and backsliding", but these cycles attenuate over time. And if reports are discontinued after two years, effects are relatively persistent, decaying at 10-20 percent per year.
References
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A Behavioral Model of Rational Choice
TL;DR: In this article, a model for the description of rational choice by organisms of limited computational ability is proposed, and the model is used to describe rational choice in organisms with limited computational abilities.
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How Much Should We Trust Differences-In-Differences Estimates?
TL;DR: In this article, the authors randomly generate placebo laws in state-level data on female wages from the Current Population Survey and use OLS to compute the DD estimate of its "effect" as well as the standard error of this estimate.
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An Exploration in the Theory of Optimum Income Taxation
TL;DR: In this paper, the authors make the following simplifying assumptions: (1) Intertemporal problems are ignored; (2) the tax system that would bring about that result would completely discourage unpleasant work; and (3) what such a tax schedule would look like; and what degree of inequality would remain once it was established.
Posted Content
From Principles of Political Economy
TL;DR: In this paper, the following sections are included: Of Co-operation, or The Combination of Labor of Production on a Large, and production on a Small Scale, and of Cooperation and Cooperation of Labor
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A Contribution to the Theory of Taxation
TL;DR: In this paper, the authors consider the problem of adjusting the marginal utility of money to different people in a purely competitive system with no foreign trade and assume that private and social net products are always equal or have been made so by State interference not included in the taxation.