Jacob Goldin

First name
Jacob
Last name
Goldin

Year of Publication
2011
Abstract

Recent evidence suggests consumers pay less attention to commodity taxes that are levied at the register than to taxes that are included in a good’s posted price. If this attention gap is larger for high-income consumers than for low-income consumers, policymakers can manipulate a tax’s regressivity by altering the fraction of the tax imposed at the register. We investigate income differences in attentiveness to cigarette taxes, exploiting state and time variation in cigarette excise and sales tax
rates. Whereas all consumers respond to taxes that appear in cigarettes’ posted price, only low-income consumers respond to taxes levied at the register.

Number
561a
Date Published
08/2011
Publication Language
eng
Citation Key
8411
Goldin, J., & Homonoff, T. (2011). Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01wm117n99n (Original work published 08/2011AD)
Working Papers

Author
Year of Publication
2012
Abstract

Recent empirical work suggests that how an individual responds to a tax depends at least in part on the tax's salience. The more salient a tax is, the more taxpayers adjust their demand in response to changes in the taxed good's after-tax price. If tax salience affects behavior, a natural question follows: How salient should a government's revenue collection system be? I investigate this question by considering
the problem faced by a benevolent government choosing between high- and low-salience commodity taxes to meet a revenue constraint. I show that low-salience taxes introduce two offsetting welfare effects: on the one hand, they reduce the excess burden traditionally associated with distortionary taxation by dampening consumers' substitution away from the taxed good; on the other hand, low-salience taxes introduce new welfare costs by causing consumers to make optimization errors when deciding how much
of each good to purchase. Under certain conditions, I show that governments can utilize a combination of high- and low-salience commodity taxes to achieve the first-best welfare outcome, even without employing a lump-sum tax. I also derive a simple and intuitive formula that characterizes the optimal mix between
high- and low-salience taxes needed to obtain this outcome. Under the optimal policy, the low-salience tax is strictly non-zero, and the ratio of low- to high-salience taxes is 1) increasing in the compensated own-price elasticity of demand for the taxed good, 2) decreasing in the income-sensitivity of the taxed
good, and 3) decreasing in the taxed good's share of the budget. Finally, high-salience taxes tend to be efficient when consumption of the taxed good generates negative externalities.

Number
571
Date Published
03/2012
Publication Language
eng
Citation Key
8730
Goldin, J. (2012). Optimal Tax Salience. Retrieved from http://arks.princeton.edu/ark:/88435/dsp019306sz32s (Original work published 03/2012AD)
Working Papers

Author
Year of Publication
2013
Abstract

Recent empirical work suggests that consumers systematically misperceive commod-ity taxes when the after-tax price is not prominent. I show how policymakers may utilize such low-salience taxes to enhance consumer welfare. The optimal combination of high-and low-salience taxes balances two competing welfare effects: low-salience taxes accommodate lower tax rates but induce consumers to misallocate their budgets. The efficiency gains from implementing the optimal policy are substantial, up to the entire deadweight loss from distortionary taxation. The surprising result that the optimal policy is to induce taxpayer mistakes can be readily understood as an application of the theory of the second-best.

Number
571a
Date Published
11/2013
Publication Language
eng
Citation Key
8963
Goldin, J. (2013). Optimal Tax Salience. Retrieved from http://arks.princeton.edu/ark:/88435/dsp015425k982p (Original work published 11/2013AD)
Working Papers

Year of Publication
2016
Abstract

Over 20 percent of prison and jail inmates in the United States are currently awaiting trial,
but little is known about the impact of pre-trial detention on defendants. This paper uses the
detention tendencies of quasi-randomly assigned bail judges to estimate the causal effects of
pre-trial detention on subsequent defendant outcomes. Using data from administrative court
and tax records, we find that being detained before trial significantly increases the probability of
a conviction, primarily through an increase in guilty pleas. Pre-trial detention has no detectable
effect on future crime, but decreases pre-trial crime and failures to appear in court. We also find
suggestive evidence that pre-trial detention decreases formal sector employment and the receipt
of employment- and tax-related government benefits. We argue that these results are consistent
with (i) pre-trial detention weakening defendants’ bargaining position during plea negotiations,
and (ii) a criminal conviction lowering defendants’ prospects in the formal labor market.

Number
601
Date Published
08/2016
Publication Language
eng
Citation Key
9646
Goldin, J., Dobbie, W., & Yang, C. (2016). The Effects of Pre-Trial Detention on Conviction, Future Crime, and Employment: Evidence from Randomly Assigned Judges. Retrieved from http://arks.princeton.edu/ark:/88435/dsp018049g752g (Original work published 08/2016AD)
Working Papers

Year of Publication
2010
Abstract

Recent work suggests that consumers respond differently to taxes that are included in a good’s posted price
and taxes that are added upon checking out at the register. This paper investigates how the government’s choice
between these “posted” and “register” taxes affects the distribution of a tax’s burden. We show that when
high- and low-income consumers differ in their attentiveness to register taxes, policymakers can lessen a tax’s
regressivity by manipulating the fraction of a tax that is added at the register. We then turn to the case of
cigarettes, and investigate whether high- and low-income consumers do in fact differ in their attentiveness to
register taxes on that good. To answer that question, we link state and time variation in cigarette excise and
sales tax rates to survey data about cigarette consumption from the Behavioral Risk Factor Surveillance System.
Whereas both high- and low-income consumers respond to cigarette excise taxes (which appear in the posted
price), we find that only low-income consumers respond to sales taxes on cigarettes (which are added at the
register). Our results suggest that policymakers can ease the financial burden of cigarette taxes on the poor by
levying such taxes at the register instead of including them in the cigarette’s posted price.

Number
561
Date Published
12/2010
Publication Language
eng
Citation Key
8337
Goldin, J., & Homonoff, T. (2010). Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01wm117n980 (Original work published 12/2010AD)
Working Papers