Abstract

Vehicle Purchase Tax (VPT), which acts as an external event for sellers, enables policymakers to regulate car ownership. However, it’s unclear how consumer responses vary under VPT changes, which affect policy evaluation and business decisions. Given that online reviews reflect consumers’ perceptions, this study aims to explore the effect of VPT changes on review valence. Drawing on construal level theory and price-quality relationships, this study investigates two VPT changes implemented by Chinese government using the difference-in-differences method with coarsened exact matching. It is found that VPT reduction has no effect on review valence for consumers with high temporal distance, but decreases that for consumers with low temporal distance. Meanwhile, VPT increase raises the valence of all consumers’ online reviews. The present study contributes to VPT research and online reviews literature by identifying the impact of VPT changes on online review valence, and provides practical implications for policymakers and sellers.

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Paper Number 1664; Track Economics; Complete Paper

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