On Bunching and Identification of the Taxable Income Elasticity
Bibliographic Data
| ID | 10172886 |
|---|---|
| Authors | Sören Blomquist (0000-0001-8527-1501, Uppsala University), Whitney K Newey (Massachusetts Institute of Technology), Anil Kumar (0000-0002-3428-3200, Federal Reserve Bank of Dallas), Che-Yuan Liang (0000-0002-6016-0546, Uppsala University) |
| Year | 2021 |
| Volume | 129 |
| Issue | 8 |
| Pages | 2320-2343 |
| Publication date | 2021-03-24 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/714446 |
| OpenAlex | W3125800872 |
| Language | EN |
| Citations received | 5 |
| References cited | 25 |
The elasticity of taxable income is vital when predicting the effect of taxes. Bunching at kinks/notches has been used to estimate this elasticity. We show that when the preference distribution is unrestricted, bunching at a kink or a notch is not informative about the size of the elasticity, and neither is the entire distribution of taxable income. Bunching identifies the taxable income elasticity when the preference distribution is correctly specified across the kink and provides bounds under restrictions on the preference distribution. We find wide bounds in an empirical example based on upper and lower bounds for the preference density
Econometrics · Economics · Elasticity (physics · Income elasticity of demand · Microeconomics · Physics · Preference · Taxable income · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics · Mathematics · Taxation and Compliance Studies
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| Unique citing works | 5 |
|---|---|
| Citations per year | 1,25 |
| Citation span | 2022 - 2025 (4) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 5 |