Taxes linked to lower consumption
Comparing Taxes less subsidies on products (current LCU), per unit of GDP with Final consumption expenditure (constant 2015 US$), per capita across 158 countries, 2018–2025.
- Rank correlation
- -0.62
- Holding size constant
- -0.49
- Countries compared
- 158
- Period
- 2018–2025
What might link these
The negative correlation between taxes less subsidies on products and final consumption expenditure per capita might suggest that higher taxes on products could lead to reduced consumer spending. However, a careful reader should consider the potential impact of other economic factors, such as income inequality, which could be a likely confounder. The relationship may also be influenced by differences in tax policies and economic systems across countries.
Why this is not proof of anything
This is a correlation across countries, not an experiment. It cannot show that either indicator causes the other, and both may simply follow a third thing. This correlation could mislead by implying a direct causal link between taxes and consumption, when in fact other underlying economic factors may be driving the relationship.
The second figure above repeats the measurement with national population and income held constant. It is the more conservative number: a relationship that largely disappears there was mostly telling you that larger, richer countries have more of most things.
How this was measured
Both indicators were ranked across every country reporting each, and the two rankings compared — ranks rather than raw values, because a handful of very large countries can otherwise manufacture a relationship on their own. The calculation is arithmetic over figures already published on this site; the commentary above is drafted from the two indicator names and the resulting coefficients.