Silviase/jgov_v1.4_full_ann huggingface dataset:
$$ \left(1\right)\ln\left(\frac{C_{_{h,t+1}}}{C_{_{h,t}}}\right)=\sum_{n=0}^{2}\ a_{_{1n}}\cdot\left(\frac{Taxcut_{_{h,t+1-n}}}{Monthly Income_{_{h,\tau-1}}}\right)+Z_{_{h,t}}^{^{\prime}}\cdot a_{_{3}}+Month_{_{t}}^{^{\prime}}\cdot a_{_{4}}+\varepsilon_{_{t}} $$

where h indexes households and t refers to the month. The dependent variable is the log of the ratio of monthly consumption in household h in month t. The main independent variable is $ \frac{TaxcutN_{h,t+1-n}}{Monthly Income_{h,\tau-1}} $ , which is the value of tax cuts received by a household relative to the household's monthly income. $ Monthly Income_{h,\tau-1} $ is calculated as the previous year's pretax income divided by 12. We include lags of both main independent variables to allow for the possibility that a household does not spend the tax cut benefit immediately. The monthly amount of tax cut is assumed to be exogenous and is calculated as described in the previous section. For years in which there was no tax cut, the value of $ \frac{TaxcutN_{h,t+1-n}}{Monthly Income_{h,\tau-1}} $ is zero. The coefficients on the main independent variable measure the elasticity of consumption to income due to the tax cuts. $ Z_{h,t} $ is a vector of household characteristics (a quadratic in the age of the household head, the number of family members and change in the number of family members). Month t is a vector of indicator variables for each month in each year. We excluded observations if the absolute change in monthly consumption exceeds the mean by more than three standard deviations.

As long as the main independent variables are orthogonal to other income shocks, the estimated coefficients on these are not affected. In order to address the possibility that omission of other income shocks as independent variables affected the estimates of the coefficients on the main variables, I also employed the following alternative specification.

$$ \begin{aligned}(2)&n\left(\frac{C_{h,t+1}}{C_{h,t}}\right)=\sum_{n=0}^{2}a_{1n}\cdot\left(\frac{Taxcut_{h,t+1-n}}{Monthly Income_{\tau-1}}\right)+\sum_{n=0}^{2}a_{2n}\cdot\left(\frac{Bonus_{h,t+1-n}}{Monthly Income_{\tau-1}}\right)\\&+\sum_{n=0}^{3}a_{3n}\cdot\left(\frac{AdjIncome_{h,t-n}}{Monthly Income_{\tau-1}}\right)+Z_{h,t}{}^{^{\prime}}\cdot a_{4}+Month_{t}{}^{^{\prime}}\cdot a_{5}+\varepsilon_{t}\end{aligned} $$

where $ \frac{Bonus_{h,t+1-n}}{MonthlyIncome_{h,t-1}} $ is the value of bonus received by a household relative to the household's monthly income. In Japan, bonuses are usually received in June or July. $ \frac{AdjIncome_{h,t-n}}{MonthlyIncome_{h,t-1}} $ is other income in each month, adjusted for any tax cuts and bonuses. Lags are included in order to control for cyclical income movements other than tax cuts $ ^{7} $ .
We use specifications (1) and (2) to assess the 1994 tax cut as discussed above. We used the sample between 1990 and 1993 as the control years to detect whether some specific shocks in 1998 are driving the results.

Table 2 reports the results on total consumption base on the specification (1) and (2). Focusing on the results based on the April-September panel, the coefficients are positive and significant for one-month lag but coefficients on the two-month lagged variables are negative and significant. These results suggest that the 1994 tax cut stimulated consumption temporarily but that the effect did not last for some months. These coefficients in columns (3) and (4) indicate that the estimated MPC on impact is $ 0.2^{8} $ .

In order to investigate the possibility that the tax cut did stimulate some specific type of good and services, Table 31 and 32 report the results by types of consumption. Table 31 shows the results of specification (1) on consumption disaggregated by type of goods and services and Table 3-2 reports those of specification (2). Both tables indicate that the coefficients for one month lag in nondurables are positive and significant and that for two month lag is negative and comparable with the one-month lag. Since consumption of non-durables occupies 19% of monthly pre-tax income, the estimated coefficient reported in column (5) implies a marginal propensity to consume (MPC) is estimated to be 0.1 on impact but it declines in subsequent months. Moreover, the coefficient in semi-durables for one month lag is significantly positive in Table 3-2 though that is not significant in Table 3-1 $ ^{9} $ . The coefficients in semi-durables for two month lag are negative and significant in both tables. As in the non-durable consumption, the effect on impact is substituted soon.

This indicates the 1994 tax cut stimulated services consumption with an MPC of 0.1-0.2, but that the effect was substituted immediately in subsequent months $ ^{10} $ . These findings are roughly consistent with past research on Japanese tax cuts in the 1990's. Hori, Hsieh, Murata and Shimizutani (2002) demonstrate that the 1999 shopping coupon program stimulated consumption of semi-durables with an MPC of 0.3-0.4 in the first month but that the MPC falls to 0.1 over the next 3 or 4 months. Part I demonstrates that the 1998 tax cut stimulated consumption of services with a comparable MPC and that it was substituted in the subsequent months $ ^{11} $ .
### 6. Conclusion

This paper explores the reaction of Japanese consumers to the 1994 tax cut, which was the first tax cut administered by the Japanese government in the 1990s. Micro-level data from the Family Income and Expenditure Survey (FIES) is used to evaluate the effect of the 1994 tax cut on consumption. The estimates weakly suggest that tax cuts undertaken to stimulate the weak economy in 1994 had some effect on consumption of services or semi-durables. An MPC of 0.1-0.2 is estimated right after implementation, but the positive effect was substituted immediately in subsequent months. In other words, consumers reacted to the temporary tax cut but the effect was small and transitory. These findings are roughly consistent with the effect of the 1998 tax cut and the 1999 shopping coupon program.

An important topic for further research would be to evaluate the effect of permanent tax cuts, which were implemented in 1995 and 1999. Especially, a comparison with the 1994 and 1995 tax cut would be interesting because the total tax cut benefits for individual households were similar but more than half of the 1995 tax cut was permanent. An empirical investigation on the effect of permanent tax cuts compared with temporary tax cuts will bring strong implications for both policy-makers and academic researchers.
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Table 1: Summary Statistics

Mean	S. D.
March-August Panel (N=3,090)
Consumption (exc. Transfer or gift)	278,753	208,074
Durables	19,498	110,637
Semi-durables	36,370	49,676
Non-durables	113,648	42,859
Services	109,237	131,330
National Income Tax Cut Benefit $ ^{1} $	30,432	37,933
Local Inhabitant Tax Cut Benefit $ ^{1} $	22,756	76,974
Bonus	95,860	294,656
Bonus (June)	290,153	494,867
Monthly income $ ^{2} $	587,439	263,310
Age (household head)	44.3	10.1
Number of family members	3.7	1.2
April-September Panel (N=2,908)
Consumption (exc. Transfer or gift)	273,167	230,544
Durables	18,924	130,304
Semi-durables	34,456	63,100
Non-durables	111,418	41,980
Services	108,369	134,827
National Income Tax Cut Benefit $ ^{1} $	31,950	41,572
Local Inhabitant Tax Cut Benefit $ ^{1} $	23,651	66,526
Bonus	92,007	293,118
Bonus (June)	322,036	500,252
Monthly income $ ^{2} $	584,132	259,281
Age (household head)	44.6	10.3
Number of family members	3.6	1.2

2 Pretax annual income/12.

The number is June for the national tax cut and June or July for the local inhabitant tax cut.

Note: Unit of observation is a household. Consumption refers to average monthly consumption in current yen.
Table 2: Impact of the 1994 Tax Cuts on Total Consumption

Column	(1)	(2)	(3)	(4)
Panel	Mar.-Aug	Mar.-Aug.	Apr.-Sep.	Apr.-Sep.
Specification	(1)	(2)	(1)	(2)
Taxcuth,t+1Monthly Incomeh	0.10(0.17)	-0.09(0.17)	0.11(0.19)	-0.01(0.19)
Taxcuth,tMonthly Incomeh	-0.09(0.20)	0.07(0.20)	0.37*(0.21)	0.43**(0.22)
Taxcuth,t-1Monthly Incomeh	-0.38*(0.22)	-0.29(0.22)	-0.74**(0.23)	-0.77**(0.23)
Taxcuth,t-2Monthly Incomeh	0.01(0.25)	-0.07(0.25)
Sum of the Coefficients on tax cut	-0.37(0.24)	-0.30(0.24)	-0.26(0.28)	-0.41(0.29)
Bonus (current, lagged)	No	Yes	No	Yes
Lags of Current Income	No	Yes	No	Yes
F test(Prob.>F)	2.01(0.11)	0.66(0.57)	4.60(0.00)	4.91(0.00)
R squared (adjusted)	0.03	0.02	0.03	0.05
s.e.e.	0.35	0.35	0.35	0.35
Number of Observation	15,133	15,133	14,238	14,238

Notes: Standard errors in parenthesis. The dependent variable is change in the log of monthly total consumption except durables. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies. The sample is 1990-1994. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Table 3-1: Impact of the 1994 Tax Cuts on Consumption by Type of Goods (Specification (1): Euler Equation)

Column	(1)	(2)	(3)	(4)	(5)	(6)
Panel	Mar.-Aug	Mar.-Aug	Mar.-Aug	Apr.-Sep	Apr.-Sep	Apr.-Sep
Dependent var.	Semi-durables	Non-durables	Services	Semi-durables	Non-durables	Services
Taxcuth,t+1Monthly Incomeh	0.20(0.58)	-0.09(0.12)	0.14(0.33)	0.22(0.62)	-0.05(0.13)	0.54(0.35)
Taxcuth,tMonthly Incomeh	-0.45(0.68)	0.00(0.14)	0.00(0.39)	0.90(0.71)	0.29**(0.15)	-0.23(0.40)
Taxcuth,t-1Monthly Incomeh	-0.60(0.75)	-0.11(0.15)	-0.50(0.43)	-1.65**(0.76)	-0.33**(0.16)	-0.09(0.43)
Taxcuth,t-2Monthly Incomeh	0.51(0.84)	-0.02(0.17)	-0.52(0.47)
Sum of the coefficients on tax cut	-0.86(0.80)	-0.19(0.16)	-0.36(0.46)	-0.03(0.94)	-0.11(0.20)	-0.32(0.53)
F test(Prob.>F)	0.83(0.48)	0.48(0.69)	0.74(0.53)	1.67(0.15)	2.17(0.07)	1.28(0.28)
R squared (adjusted)	0.02	0.02	0.01	0.02	0.03	0.01
s.e.e.	1.18	0.24	0.68	1.17	0.24	0.66
Number of Observation	14,574	15,216	15,089	13,770	14,324	14,203

Notes: Standard errors in parenthesis. The dependent variable is change in the log of monthly consumption by type of goods. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies as well as bonus and lagged current income relative to monthly income in the previous year. All regressions include control years. The sample is 1990-1994. $ * $ * indicates 5% level significance and $ * $ does 10% level. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Table 3-2: Impact of the 1994 Tax Cuts on Consumption by Type of Goods (Specification (2))

Column	(1)	(2)	(3)	(4)	(5)	(6)
Panel	Mar.-Aug	Mar.-Aug	Mar.-Aug	Apr.-Sep	Apr.-Sep	Apr.-Sep
Dependent var.	Semi-durables	Non-durables	Services	Semi-durables	Non-durables	Services
Taxcuth,t+1Monthly Incomeh	-0.10(0.59)	-0.14(0.12)	-0.09(0.33)	-0.10(0.63)	-0.07(0.13)	0.34(0.35)
Taxcuth,tMonthly Incomeh	-0.09(0.68)	0.03(0.14)	0.20(0.39)	1.21*(0.72)	0.32**(0.15)	-0.04(0.41)
Taxcuth,t-1Monthly Incomeh	-0.37(0.76)	-0.03(0.15)	-0.41(0.43)	-1.71**(0.77)	-0.35**(0.16)	-0.24(0.43)
Taxcuth,t-2Monthly Incomeh	0.44(0.86)	-0.04(0.18)	-0.49(0.48)
Sum of the coefficients on tax cut	-0.56(0.81)	-0.14(0.16)	-0.30(0.46)	-0.16(0.96)	-0.13(0.20)	-0.43(0.54)
F test(Prob.>F)	0.19(0.91)	0.52(0.67)	0.30(0.82)	1.70(0.15)	2.45(0.04)	1.10(0.36)
R squared (adjusted)	0.03	0.03	0.03	0.02	0.03	0.03
s.e.e.	1.17	0.24	0.68	1.17	0.24	0.65
Number of Observation	14,574	15,216	15,089	13,770	14,324	14,203

Notes: Standard errors in parenthesis. The dependent variable is change in the log of monthly consumption by type of goods. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies as well as bonus and lagged current income relative to monthly income in the previous year. All regressions include control years. The sample is 1990-1994. $ * $ * indicates 5% level significance and $ * $ does 10% level. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Appendix 1. Impact of the 1994 Tax Cuts on Total Consumption (Normalization: Average Consumption before June)

Column	(1)	(2)	(3)	(4)
Panel	Mar.-Aug	Mar.-Aug.	Apr.-Sep.	Apr.-Sep.
Specification	(1)	(2)	(1)	(2)
Taxcuth,t+1Monthly Incomeh	0.05(0.06)	-0.00(0.06)	0.01(0.05)	-0.02(0.05)
Taxcuth,tMonthly Incomeh	-0.04(0.07)	0.04(0.07)	0.12**(0.06)	0.12**(0.06)
Taxcuth,t-1Monthly Incomeh	-0.11(0.07)	-0.14*(0.08)	-0.12**(0.06)	-0.11*(0.06)
Taxcuth,t-2Monthly Incomeh	-0.25(0.23)	-0.45*(0.23)
Sum of the Coefficients on tax cut	-0.09(0.08)	-0.09(0.08)	-0.24(0.22)	-0.45**(0.23)
Bonus (current, lagged)	No	Yes	No	Yes
Lags of Current Income	No	Yes	No	Yes
F test(Prob.>F)	1.84(0.14)	1.16(0.32)	3.06(0.02)	3.59(0.01)
R squared (adjusted)	0.03	0.04	0.03	0.04
s.e.e.	0.35	0.35	0.35	0.35
Number of Observation	15,133	15,133	14,328	14,238

Notes: Standard errors in parenthesis. The dependent variable is change in the log of monthly total consumption except durables. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to average consumption between the first month of each panel and May. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies. The sample is 1990-1994. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Appendix 2-1: Impact of the 1994 Tax Cuts on Consumption by Type of Goods (Normalization: Average Consumption before June, Specification(1))

Column	(1)	(2)	(3)	(4)	(5)	(6)
Panel	Mar.-Aug	Mar.-Aug	Mar.-Aug	Apr.-Sep	Apr.-Sep	Apr.-Sep
Dependent var.	Semi-durables	Non-durables	Services	Semi-durables	Non-durables	Services
Taxcuth,t+1Monthly Incomeh	0.07(0.19)	0.01(0.04)	0.02(0.11)	0.20(0.18)	0.02(0.04)	0.07(0.10)
Taxcuth,tMonthly Incomeh	-0.10(0.23)	-0.05(0.05)	0.06(0.13)	0.08(0.20)	0.06(0.04)	0.07(0.11)
Taxcuth,t-1Monthly Incomeh	-0.26(0.25)	0.02(0.05)	-0.19(0.15)	-0.20(0.20)	-0.05(0.04)	-0.06(0.11)
Taxcuth,t-2Monthly Incomeh	-0.22(0.77)	-0.15(0.16)	-0.48(0.43)
Sum of the coefficients on tax cut	-0.29(0.27)	-0.02(0.05)	-0.11(0.15)	-0.14(0.74)	-0.12(0.15)	-0.39(0.42)
F test(Prob.>F)	0.91(0.44)	0.46(0.71)	0.66(0.58)	0.91(0.46)	1.62(0.17)	1.02(0.39)
R squared (adjusted)	0.02	0.02	0.01	0.02	0.03	0.01
s.e.e.	1.18	0.24	0.68	1.17	0.24	0.66
Number of Observation	14,574	15,216	15,089	13,770	14,324	14,203

Notes: Standard errors in parenthesis. The dependent variable is change in the log of monthly consumption by type of goods. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies as well as bonus and current income relative to the average consumption between the first month of each panel and May. All regressions include control years. The sample is 1990-1994. $ * $ * indicates 5% level significance and $ * $ does 10% level. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Appendix 2-2: Impact of the 1994 Tax Cuts on Consumption by Type of Goods (Normalization: Average Consumption before June, Specification(2))

Column	(1)	(2)	(3)	(4)	(5)	(6)
Panel	Mar.-Aug	Mar.-Aug	Mar.-Aug	Apr.-Sep	Apr.-Sep	Apr.-Sep
Dependent var.	Semi-durables	Non-durables	Services	Semi-durables	Non-durables	Services
Taxcuth,t+1Monthly Incomeh	-0.01(0.20)	-0.01(0.04)	-0.05(0.11)	0.14(0.18)	0.02(0.04)	0.02(0.10)
Taxcuth,tMonthly Incomeh	0.03(0.23)	-0.03(0.05)	0.17(0.13)	0.08(0.20)	0.06(0.04)	0.12(0.11)
Taxcuth,t-1Monthly Incomeh	-0.26(0.26)	0.04(0.05)	-0.24(0.15)	-0.22(0.21)	-0.06(0.04)	-0.05(0.12)
Taxcuth,t-2Monthly Incomeh	-0.47(0.78)	-0.19(0.16)	-0.66(0.44)
Sum of the coefficients on tax cut	-0.24(0.27)	-0.01(0.05)	-0.12(0.15)	-0.47(0.75)	-0.17(0.16)	-0.57(0.42)
F test(Prob.>F)	0.44(0.72)	0.35(0.79)	0.99(0.40)	0.94(0.44)	2.30(0.06)	1.37(0.24)
R squared (adjusted)	0.03	0.03	0.02	0.02	0.03	0.03
s.e.e.	1.17	0.24	0.68	1.17	0.24	0.65
Number of Observation	14,574	15,216	15,089	13,770	14,324	14,203

Notes: Standard errors in parenthesis. The dependent variable is change in the log of monthly consumption by type of goods. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies as well as bonus and current income relative to average consumption between the first month of each panel and May. All regressions include control years. The sample is 1990-1994. $ * $ * indicates 5% level significance and $ * $ does 10% level. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Appendix 3-1: Impact of the 1994 Tax Cuts by Income Levels (Specification (1))

Column	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Panel	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep
INCOME level	Above	Below	Above	Below	Above	Below	Above	Below
Dependent var.	Total	Total	Semi-durables	Semi-durables	Non-durables	Non-durables	Services	Services
Taxcuth,t+1	-0.00(0.24)	0.24(0.40)	-0.07(0.74)	1.54(1.42)	0.03(0.15)	-0.54*(0.30)	0.54(0.43)	0.97(0.76)
Monthly Incomeh
Taxcuth,t	0.48*(0.27)	0.41(0.45)	0.83(0.86)	0.84(1.59)	0.33*(0.18)	0.74**(0.33)	-0.18(0.50)	-0.75(0.86)
Monthly Incomeh
Taxcuth,t-1	-0.97**(0.29)	-0.42(0.48)	-1.58*(0.92)	-2.97*(1.69)	-0.40**(0.19)	-0.39(0.35)	-0.49(0.54)	1.17(0.91)
Monthly Incomeh
Taxcuth,t-2	0.29(0.33)	-0.51(0.53)	0.86(1.03)	2.18(1.87)	-0.04(0.21)	-0.05(0.39)	-0.28(0.61)	-1.53(1.00)
Monthly Incomeh
Sum of the coefficientson tax cut	-0.20(0.36)	-0.29(0.63)	0.04(1.12)	1.59(2.20)	-0.08(0.23)	-0.23(0.46)	-0.41(0.66)	-0.15(1.19)
F test(Prob.>F)	3.53(0.01)	1.26(0.29)	0.81(0.52)	1.38(0.24)	2.54(0.04)	1.62(0.17)	1.26(0.28)	0.92(0.45)
R squared (adjusted)	0.03	0.03	0.02	0.01	0.02	0.03	0.01	0.02
s.e.e.	0.38	0.33	1.18	1.16	0.25	0.24	0.70	0.63
Number of Observation	5,958	8,280	5,846	7,924	6,022	8,302	5,955	8,248

Notes: Standard errors in parenthesis. The panel from April to September is used. The dependent variable is change in the log of monthly consumption by type of goods. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies as well as bonus and lagged current income relative to monthly income in the previous year. All regressions include control years. The sample is 1990-1994. $ * $ * indicates 5% level significance and $ * $ does 10% level. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.
Appendix 3-2: Impact of the 1994 Tax Cuts by Income Levels (Specification (2))

Column	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Panel	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep	Apr.-Sep
INCOME	Above	Below	Above	Below	Above	Below	Above	Below
Dependent var.	Total	Total	Semi-durables	Semi-durables	Non-durables	Non-durables	Services	Services
Taxcuth,t+1Monthly Incomeh	-0.06(0.24)	-0.10(0.40)	0.11(0.77)	0.46(1.41)	0.07(0.16)	-0.65**(0.30)	0.29(0.45)	0.64(0.76)
Taxcuth,tMonthly Incomeh	0.56**(0.28)	0.58(0.45)	0.61(0.89)	1.74(1.60)	0.34*(0.18)	0.82**(0.33)	0.25(0.52)	-0.75(0.86)
Taxcuth,t-1Monthly Incomeh	-1.07**(0.31)	-0.32(0.48)	-1.69*(0.96)	-2.80*(1.70)	-0.47**(0.20)	-0.34(0.35)	-0.83(0.57)	1.51(0.90)
Taxcuth,t-2Monthly Incomeh	0.26(0.34)	-0.56(0.53)	0.85(1.06)	1.71(1.89)	-0.05(0.22)	-0.03(0.39)	-0.15(0.63)	-1.41(1.01)
Sum of the coefficients on tax cut	-0.31(0.37)	-0.39(0.63)	-0.12(1.17)	1.12(2.22)	-0.11(0.24)	-0.19(0.46)	-0.44(0.69)	-0.02(1.19)
F test(Prob.>F)	4.02(0.00)	1.09(0.36)	0.90(0.47)	0.92(0.45)	3.26(0.01)	1.99(0.09)	1.33(0.26)	0.86(0.49)
R squared (adjusted)	0.04	0.05	0.02	0.02	0.02	0.04	0.03	0.04
s.e.e.	0.38	0.33	1.18	1.16	0.25	0.24	0.69	0.62
Number of Observation	5,958	8,280	5,846	7,924	6,022	8,302	5,955	8,248

Notes: Standard errors in parenthesis. The panel from April to September is used. The dependent variable is change in the log of monthly consumption by type of goods. The estimated elasticity to the tax cuts is the coefficient on tax cuts relative to monthly pre-tax income in the previous year. All regressions also include a quadratic in the age of the household head, number of family members, change in number of family members and month dummies as well as bonus and current income relative to monthly income in the previous year. All regressions include control years. The sample is 1990-1994. $ * $ * indicates 5% level significance and $ * $ does 10% level. The null hypothesis for F test is all coefficients on tax cut relative to monthly income are zero.