NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Ben Gilbert

Colorado School of Mines
1500 Illinois St
Golden, CO 80401

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NBER Working Papers and Publications

September 2018Dynamic Corrective Taxes with Time-Varying Salience
with Joshua S. Graff Zivin: w25014
The intermittency of payment for many goods creates a disconnect between paying and consuming such that the marginal price is not always salient when consumption decisions are made. This paper derives optimal dynamic corrective taxes when there are externalities as well as internalities from inattention and persistence in consumption across periods. Our optimal taxes address dynamic inefficiencies that are not captured in static models of inattention. We also characterize a second-best constant tax and the excess burden associated with time-invariant tax rates. We then calibrate the model to U.S. residential electricity consumption.
October 2013Dynamic Salience with Intermittent Billing: Evidence from Smart Electricity Meters
with Joshua S. Graff Zivin: w19510
Digital tracking and the proliferation of automated payments have made intermittent billing more commonplace, and the frequency at which consumers receive price, quantity, or total expenditure signals may distort their choices. This category of goods has expanded from household utilities, toll road access and software downloads to standard consumption goods paid by credit card or other "bill-me-later"-type systems. Yet we know surprisingly little about how these payment patterns affect decisions. This paper exploits hourly household electricity consumption data collected by "smart" electricity meters to examine dynamic consumer behavior under intermittent expenditure signals. Households reduce consumption by 0.6% to 1% following receipt of an electricity bill, but the response varies consi...

Published: Gilbert, Ben & Graff Zivin, Joshua, 2014. "Dynamic salience with intermittent billing: Evidence from smart electricity meters," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 176-190. citation courtesy of

 
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