consumer behaviour

Publication date: 10 Mar 2009 | Publication type: NIESR Discussion Paper | Authors: Barrell, R, Weale, M | JEL classification: E620, E650, H310 | NIESR discussion paper number: 325
We explore the effects of a temporary cut in VAT, identifying three possible effects: an income effect as people benefit from a lower cost of living during the period of the reduction, a substitution effect as people bring their consumption forward and an arbitrage effect as people buy non-...