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Guest lecture

The influence of decision making costs on the effectiveness of tax incentives to save

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Outline of work

This study considers the efficacy of a tax incentivised savings scheme in context of decision making rigidities. Analysis is based on a classical life-cycle model of savings and investment decisions, augmented with a salience cost over participation in Individual Savings Accounts (ISAs) currently run in the UK. Calibration results indicate that salience costs help to match the model to observed rates of participation in ISAs. The calibrated model suggests that the price effects of ISAs are insufficient to generate appreciable increases in private sector savings, with or without salience costs. In this context salience costs have context, an important influence on the distribution of welfare benefits that are delivered by the ISAs scheme.


Research in 2011. Prior to that he worked for a decade at the National Institute of Economic and Social Research in London, and was awarded a D. Phil. (Economics) from the University of Oxford. His research interests include the redistributive effects of fiscal policy, later-life-learning, pension policy and sustainability, household savings and retirement behaviour, and inequality and growth. van de Ven has published a number of articles, the most recent of which appear in Economic Modelling, the Economic Journal, and the Bulletin of Economic Research.

Note: Papers, presentation slides and any other material provided by the Guest Lecturer will be made available some time after the lecture at Publications > Media & Speeches > Guest Lectures by Visiting Academics.

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Last updated: 
Thursday, 31 October 2013