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Working Paper
The effect of sales tax holidays on household consumption patterns
Sales tax holidays (STHs) are the temporary suspension of state (and some local) sales taxes on selected retail items for a brief period of time. The policy has gained popularity in recent years, beginning in one state in 1997 and growing to twenty by 2008. Despite the increased frequency with which states use STHs, little research has been conducted to study how households respond to this temporary tax manipulation. Our paper offers the first household-level, microeconometric evaluation on the effect of STHs on household consumption patterns. We find that on STHs, households increase the ...
Working Paper
Revenue bubbles and structural deficits: What’s a state to do?
The 2001 recession proved alarming to state government finances. A relatively shallow national recession led to a severe downturn in state revenues that took three years to unwind. In the current economic downturn, early signs of fiscal stress are already apparent. This raises several fundamental questions: * Since 1984 the U.S. macroeconomy entered into the "Great Moderation" in which economic volatility was reduced. Has state revenue volatility relative to the business cycle increased during this period? * Has the composition of state revenues and expenditures made states more susceptible ...
Working Paper
Do Household Finances Constrain Unconventional Fiscal Policy?
When the zero lower bound on nominal interest rate binds, monetary policy makers may lack traditional tools to stimulate aggregate demand. We investigate whether ?unconventional? fiscal policy, in the form of pre-announced consumption tax changes, has the potential to meaningfully shift durables purchases intertemporally and how it is affected by consumer credit. In particular, we test whether car sales react in anticipation of future sales tax changes, leveraging 57 pre-announced changes in state sales tax rates from 1999-2017. We find evidence for substantial tax elasticities, with car ...
Newsletter
Food inflation and the consumption patterns of U.S. households
In July 2008, food prices were 6.0% above their July 2007 level. This article examines how different household types have been affected by the recent rapid rise in food prices.
Working Paper
The widow’s offering: inheritance, family structure, and the charitable gifts of women
This paper aims to explain disparities in the charitable bequest behavior of men and women. I use data on charitable bequests in wills from 17th Century Suffolk, England to investigate whether women or men were more generous to the poor when they died. Because of the difference in the legal restrictions faced by married men and married women, I choose to compare unmarried individuals. Higher proportions of unmarried men make charitable donations and men make higher average donations. I find that differences in the wealth, circumstances and family status of women can explain between 58% and ...
Journal Article
The determinants of state foreclosure rates: investigating the case of Indiana
Foreclosure rates are defined as mortgages in the foreclosure process as a percentage of all mortgages. These rates vary fairly dramatically across states. While the average foreclosure rate in the 50 states and the District of Columbia in the second quarter of 2007 was 1.25 percent, these rates ranged from a high of 3.60 percent in Ohio to a low of 0.44 percent in Wyoming. One state that has exhibited high foreclosure rates over the past decade is Indiana. Indiana ranked second highest after Ohio in the second quarter of 2007 with a foreclosure rate of 3.01 percent. The goal of this article ...
Working Paper
The Earned Income Tax Credit and Food Consumption Patterns
The Earned Income Tax Credit is unique among social programs in that benefits are not paid out evenly across the calendar year. We exploit this feature of the EITC to investigate how the credit influences the food expenditure patterns of eligible households. We find that eligible households spend relatively more on healthy items including fresh fruit and vegetables, meat and poultry, and dairy products during the months when most refunds are paid.
Working Paper
Charged and Almost Ready—What Is Holding Back the Resale Market for Battery Electric Vehicles?
We utilize vehicle registration microdata for all new and used vehicles registered in the U.S. for model years 2010-2022 to study the market for used battery electric vehicles (BEVs). From these records, we establish two stylized facts: 1) BEVs enter the used market at the slowest rate compared to any other powertrain technology, and 2) BEVs are driven significantly less than vehicles featuring other powertrain technologies. We connect these facts through a statistical model of used vehicle registration counts and find that there are significant behavioral differences between BEV and other ...
Journal Article
Unprepared for boom or bust: understanding the current state fiscal crisis
The headlines concerning state government finances have become increasingly alarming since mid-2001. This article discusses the roots of the current state fiscal crisis by looking at the decisions made by state government leaders during the long expansion. The author suggests increased use of rainy day funds as a way to avoid future crisis.
Working Paper
The incidence of inflation: inflation experiences by demographic group: 1981-2004
We use data from the Consumer Expenditure Survey from 1980-2003 combined with item specific Consumer Price Index data to calculate monthly chain-weighted inflation measures for thirteen different demographic groups and for the overall urban population from 1981-2004. We find that the inflation experiences of the different groups are very highly correlated with and similar in magnitude to the inflation experiences of the overall urban population. Over the sample period, cumulative inflation for the groups ranged from 224% to 242% as compared to inflation for the overall population of 230%. The ...