Salience and taxation: Salience effect versus information effect

By:

Zheng Yuqing [author]

Contributor(s):

Material type: Text

TextSeries: Applied economics letters ; Volume 20, number 5New York: Taylor & Francis, 2013Content type:

text

Media type:

unmediated

Carrier type:

volume

ISSN:

13504851

Subject(s):

Demand -- Information effect -- Sales tax

LOC classification:

HB1.A666 APP

Online resources:

Click here to access online

Abstract: Posting tax-inclusive price tags on grocery products can reduce demand through an information effect that corrects consumers who misperceive the actual tax status. We disentangle the information effect from the salience effect developed by Chetty, Looney and Kroft (2009, CLK for short). By utilizing CLK's survey finding that 20% of shoppers mistakenly think there is no sales tax on toothpaste, we show that the information effect actually explains 31% of the sales drop in CLK's field study. Therefore, ignoring the information effect may overestimate the salience effect by a large degree.

Reviews from LibraryThing.com:

Tags from this library: No tags from this library for this title. Log in to add tags.

Average rating: 0.0 (0 votes)

Holdings
Item type	Current library	Call number	Vol info	Copy number	Status	Notes	Date due	Barcode
Journal Article	Main Library - Special Collections	HB1.A666 APP (Browse shelf(Opens below))	Vol. 20, no. 5 (pages 508-510)	SP17976	Not for loan	For In House Use Only

Browsing Main Library shelves, Shelving location: - Special Collections Close shelf browser (Hides shelf browser)

Previous	No cover image available	No cover image available	No cover image available	No cover image available	No cover image available	No cover image available	No cover image available	Next
Previous	HB1.A666 APP Currency crises, uncertain fundamentals and private-sector forecasts	HB1.A666 APP Do female/male distinctions in language matter? Evidence from gender political quotas	HB1.A666 APP Market entry and economic diplomacy	HB1.A666 APP Salience and taxation: Salience effect versus information effect	HB1.A666 APP Determinants of corporate default: A BMA approach	HB1.A666 APP The Poisson quasi-maximum likelihood estimator: A solution to the ‘adding up’ problem in gravity models	HB1.A666 APP Long-run performance of mergers and acquisition of privately held targets: Evidence in the USA	Next

Posting tax-inclusive price tags on grocery products can reduce demand through an information effect that corrects consumers who misperceive the actual tax status. We disentangle the information effect from the salience effect developed by Chetty, Looney and Kroft (2009, CLK for short). By utilizing CLK's survey finding that 20% of shoppers mistakenly think there is no sales tax on toothpaste, we show that the information effect actually explains 31% of the sales drop in CLK's field study. Therefore, ignoring the information effect may overestimate the salience effect by a large degree.

There are no comments on this title.

to post a comment.

here