Identification in Tax-Price Regression Models: The Case of Charitable Giving
23 Pages Posted: 28 Jun 2001 Last revised: 15 Sep 2022
Date Written: September 1982
Abstract
In this paper we use an instrumental variable estimator to exploit sources of independent variation, which allows unbiased estimation of the tax-price elasticity under more general conditions. The estimator is applied to the demand for charitable giving. A charitable giving equation is an appropriate test for this procedure because it represents the purest case of a tax-price coefficient. That is, taxes are the sole source of variance in the price. The deduction is also an important policy issue. In 1982, 1.8 percent of gross income was deducted for this reason, about as much as the capital gains deduction.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance
-
Taxes and Fringe Benefits Offered by Employers
By William M. Gentry and Eric Peress