Impact of Alternative Negative Income Tax Programs on Non-Durable Consumption: Income Maintenance Experiments

摘要

In addition to altering the incentives that affect the work-leisure decision, an income maintenance program may also have an impact on consumption patterns. This report presents estimates of the effect of the SIME/DIME financial treatment component on consumption behavior. The authors find some evidence to suggest that an NIT program similar to SIME/DIME will have a marginal effect on consumption behavior, manifested through small increases in both the probability of consuming specific items and in total consumption expenditures. The writers also examine the effect of the perception of the payments as permanent or transitory income. Thier findings in this area are inconsistent, and they recommend a more rigorous examination of the issue before drawing any conclusions.