Replication data for: Temporary Investment Tax Incentives: Theory with Evidence from Bonus Depreciation
Principal Investigator(s): View help for Principal Investigator(s) Christopher L. House; Matthew D. Shapiro
Version: View help for Version V1
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| AIM_aer | 10/12/2019 08:23:AM | ||
| DATA_aer | 10/12/2019 08:24:AM | ||
| PROGS_aer | 10/12/2019 08:23:AM | ||
| PROGS_wp | 10/12/2019 08:23:AM | ||
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application/pdf | 14.8 KB | 10/12/2019 04:23:AM |
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text/plain | 14.6 KB | 10/12/2019 04:24:AM |
Project Citation:
House, Christopher L., and Shapiro, Matthew D. Replication data for: Temporary Investment Tax Incentives: Theory with Evidence from Bonus Depreciation. Nashville, TN: American Economic Association [publisher], 2008. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113249V1
Project Description
Summary:
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The intertemporal elasticity of investment for long-lived capital goods is
nearly infinite. Consequently, investment prices should fully reflect
temporary tax subsidies, regardless of the investment supply elasticity.
Since prices move one-for-one with the subsidy, elasticities can be
inferred from quantities alone. This paper uses a recent tax policy--bonus
depreciation--to estimate the investment supply elasticity. Investment in
qualified capital increased sharply. The estimated elasticity is
high--between 6 and 14. There is no evidence that market prices reacted to
the subsidy, suggesting that adjustment costs are internal, or that
measurement error masks the price changes.
Scope of Project
JEL Classification:
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G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
H25 Business Taxes and Subsidies including sales and value-added (VAT)
H32 Fiscal Policies and Behavior of Economic Agents: Firm
G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
H25 Business Taxes and Subsidies including sales and value-added (VAT)
H32 Fiscal Policies and Behavior of Economic Agents: Firm
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