Stephane Bonhomme, Angela Denis
arXiv 13 Oct 2023 · Econometrics
arXiv:2310.09105 · PDF · DOI · OpenAlex · Extracted main text
We propose a regression-based approach to estimate how individuals' expectations influence their responses to a counterfactual change. We provide conditions under which average partial effects based on regression estimates recover structural effects. We propose a practical three-step estimation method that relies on panel data on subjective expectations. We illustrate our approach in a model of consumption and saving, focusing on the impact of an income tax that not only changes current income but also affects beliefs about future income. Applying our approach to Italian survey data, we find that individuals' beliefs matter for evaluating the impact of tax policies on consumption decisions.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Manski (2004) Measuring expectations | 0.928 | 4 | 3 | 100% |
| 2 | Kaufmann and Pistaferri (2009) Disentangling insurance and information in intertemporal consumption choices | 0.843 | 4 | 4 | 75% |
| 3 | Stock (1989) Nonparametric policy analysis | 0.843 | 3 | 3 | 100% |
| 4 | Belloni, Chernozhukov, and Hansen (2014) Inference on treatment effects after selection among high-dimensional controls | 0.737 | 3 | 3 | 67% |
| 5 | Pistaferri (2001) Superior information, income shocks, and the permanent income hypothesis | 0.737 | 3 | 3 | 67% |
| 6 | Arcidiacono, Hotz, Maurel, and Romano (2020) Ex ante returns and occupational choice | 0.737 | 3 | 2 | 100% |
| 7 | Stoltenberg and Uhlendorff (2022) Consumption Choices and Earnings Expectations: Empirical Evidence and Structural Estimation | 0.737 | 3 | 2 | 100% |
| 8 | Burke and Emerick (2016) Adaptation to climate change: Evidence from US agriculture | 0.644 | 2 | 2 | 100% |
| 9 | Roth, Wiederholt, and Wohlfart (2023) The Effects of Monetary Policy: Theory with Measured Expectations | 0.644 | 2 | 2 | 100% |
| 10 | Holter, Krueger, and Stepanchuk (2019) How do tax progressivity and household heterogeneity affect Laffer curves? | 0.585 | 4 | 3 | 25% |
Showing the top 10 of 77 scored citations.