We provide the first estimate of the elasticity of marginal utility of consumption, \(\mu\) , for a post-transition economy in the Central & Eastern European region – the Czech Republic – based on household-level data. Using the absolute equal-sacrifice income tax approach, we obtain a central estimate of \(\mu\) at 1.47, which varies between 1.32 to 1.66 within the study period covering 2005–2022. Moreover, the estimate of the elasticity of marginal utility of consumption differs between various income groups, indicating that this approach is suitable only for those who pay income tax. Including the non-taxpayers segment means ceteris paribus negative \(\mu\) , and hence its smaller value for the entire population. Importantly, the \(\mu\) estimate increases when social benefits are included in gross income, and it decreases when social and health insurance contributions are included in the definition of taxes. Since parameter μ is a crucial component of the social discount rate, our result provides useful input for policies that affect inter-temporal allocations.
