Bunching Estimation and Its Theoretical and Empirical Progress

Abstract

　This paper describes the basic analytical framework of the bunching estimation method, which has been increasingly applied in recent years, especially in the fields of public finance and public economics. Bunching estimation was first established by Saez (2010) as a method for estimating the elasticity of taxable income, but in recent years its applications have spread to other fields. With the expansion of applications, many papers have been published on the extension of analysis and problems in estimation of the method.

　In this paper, I (1) describe the basic analytical framework, especially in the context of taxable income elasticity, and (2) introduce the recent development of the method and the problems and issues in estimation that have been pointed out in subsequent studies.