Taxation and Consumption: Evidence from a Representative Survey of the German Population

MAGKS Discussion Papers, No. 20-2014

22 Pages Posted: 25 Jan 2016

See all articles by Bernd Hayo

Bernd Hayo

University of Marburg - School of Business & Economics

Matthias Uhl

University Marburg

Date Written: July 2014

Abstract

Using a representative survey of the German population, this paper studies self-reported individual consumption responses to a recent payroll tax reduction. About 55 percent of the respondents report that they spend the extra money, indicating considerable potential for tax changes to affect consumption and economic activity. Our analysis of the socio-demographic and economic covariates of consumption responses suggests, among other effects, that interest rates are related to consumption responses to tax changes, and that households with higher income have a higher propensity to consume.

Keywords: Taxation, Consumption, Representative population survey, Germany

JEL Classification: E21, E62, H30

Suggested Citation

Hayo, Bernd and Uhl, Matthias, Taxation and Consumption: Evidence from a Representative Survey of the German Population (July 2014). MAGKS Discussion Papers, No. 20-2014. Available at SSRN: https://ssrn.com/abstract=2721700 or http://dx.doi.org/10.2139/ssrn.2721700

Bernd Hayo (Contact Author)

University of Marburg - School of Business & Economics ( email )

Universitaetsstr. 24
Marburg, D-35032
Germany
++49(0)6421-28-23091 (Phone)
++49(0)6421-28-23193 (Fax)

Matthias Uhl

University Marburg ( email )

Universitätsstrasse 24
Marburg, D-35032
Germany

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