Distinguishing Transitory and Permanent Price Elasticities of Charitable Giving with Pre-Announced Changes in Tax Law
AbstractThis paper develops and applies a new estimation technique for distinguishing transitory and permanent price and income elasticities of charitable giving using panel data. Twelve-year individual averages of income and deductions are combined with information on legislated changes in tax schedules, to construct instruments for permanent price and income variation. Unlike the previous literature, pre-announced changes in tax law are used to identify transitory variation, and fixed-effects are used to control for unobserved heterogeneity. The timing of giving is found to be significantly more responsive to tax incentives than is the long-run level of giving.
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Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2000-06.
Date of creation: Oct 2000
Date of revision:
Find related papers by JEL classification:
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
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- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
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- Jon Bakija & Bradley Heim, 2008. "How Does Charitable Giving Respond to Incentives and Income? Dynamic Panel Estimates Accounting for Predictable Changes in Taxation," NBER Working Papers 14237, National Bureau of Economic Research, Inc.
- Jon Bakija & Bradley Heim, 2008.
"How Does Charitable Giving Respond to Incentives and Income? New Estimates from Panel Data,"
Department of Economics Working Papers
2008-01, Department of Economics, Williams College, revised Jun 2011.
- Jon Bakija & Bradley T. Heim, 2011. "How Does Charitable Giving Respond to Incentives and Income? New Estimates from Panel Data," NBER Chapters, in: Economic Analysis of Tax Expenditures National Bureau of Economic Research, Inc.
- Kwak, Sungil, 2011. "The Impact of Taxes on Charitable Giving: Empirical Evidence from the Korean Labor and Income Panel Study," MPRA Paper 36845, University Library of Munich, Germany.
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