Replication data for: Fiscal Policy and MPC Heterogeneity

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Project Citation:

Jappelli, Tullio, and Pistaferri, Luigi. Replication data for: Fiscal Policy and MPC Heterogeneity. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116432V1

Project Description

Summary: We use responses to survey questions in the 2010 Italian Survey of Household Income and Wealth that ask consumers how much of an unexpected transitory income change they would consume. The marginal propensity to consume (MPC) is 48 percent on average. We also find substantial heterogeneity in the distribution, as households with low cash-on-hand exhibit a much higher MPC than affluent households, which is in agreement with models with precautionary savings, where income risk plays an important role. The results have important implications for predicting household responses to tax reforms and redistributive policies.

Scope of Project

JEL Classification:
      D12 Consumer Economics: Empirical Analysis
      D14 Household Saving; Personal Finance
      E21 Macroeconomics: Consumption; Saving; Wealth
      E62 Fiscal Policy
      H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
      H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes

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V1 [2019-12-07]

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