Tax Policy Transmission and Household Expenditures
税收政策传导与家庭支出
Abstract Using a novel scanner data and difference-in-differences strategy, we assess how consumers respond to a large-scale tax reform in India that introduces exogenous variations in tax rate changes at the product level. We show evidence of a strong and persistent spending response to tax rate changes. The response is highly asymmetrical, with consumers responding significantly more strongly to tax rate increases than to decreases. We find empirical support for both…