Replication data for: The Impact of Including, Adding, and Subtracting a Tax on Demand
Principal Investigator(s): View help for Principal Investigator(s) Naomi E. Feldman; Bradley J. Ruffle
Version: View help for Version V1
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Project Citation:
Feldman, Naomi E., and Ruffle, Bradley J. Replication data for: The Impact of Including, Adding, and Subtracting a Tax on Demand. Nashville, TN: American Economic Association [publisher], 2015. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114573V1
Project Description
Summary:
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We test the equivalence of tax-inclusive, tax-exclusive and tax-rebate prices through a series of experiments differing only in their handling of the tax. Subjects receive a cash budget and decide how much to keep and how much to spend on various attractively priced goods. Subjects spend significantly more under tax-exclusive prices whereas total purchases under tax-inclusive and tax-rebate prices are similar. These results persist throughout most of the ten rounds despite feedback and the ability to revise purchases. The asymmetric response to tax liabilities and rebates highlights consumers' ability both to internalize and to willfully ignore hidden price components. (JEL D12, H25, H31)
Scope of Project
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
H25 Business Taxes and Subsidies including sales and value-added (VAT)
H31 Fiscal Policies and Behavior of Economic Agents: Household
D12 Consumer Economics: Empirical Analysis
H25 Business Taxes and Subsidies including sales and value-added (VAT)
H31 Fiscal Policies and Behavior of Economic Agents: Household
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