Do Rewards Work?: Evidence from the Randomization of Public Works

Abstract

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One Size Does Not Fit All: A Field Experiment on the Drivers of Tax Compliance and Delivery Methods in Rwanda

“…In contrast, the LATE estimates for tobit and probit, presented in columns 1 and 2, are not marginal effects and are therefore not directly comparable to the ITT coefficients, at least in terms of magnitude. 47 However, they largely support the previous results, both in terms of the sign and statistical significance of the treatment variables. In particular, the public service SMS and the letter and email reminders remain very effective especially for taxpayers with a positive tax liability.…”

“…A rough calculation including all costs, including personnel cost to coordinate message delivery, results in an estimated cost per message of £0.90 for letters, £0.60 for SMS, and £0.20 for emails. 47 The LATE coefficients do not refer to marginal effects, because we used a two-step tobit estimator, as the maximum likelihood tobit had difficulties in converging due to the presence of multiple endogenous variables (i.e. multiple treatment variables).…”

“…Although most tax experiments in the literature do not take spillovers explicitly into account (Mascagni 2016), recent studies have shown that they can be sizeable (Drago, Mengel, and Traxler 2015;Carrillo, Castro, and Scartascini 2016). Although we do not formally consider spillovers across firms, we use cluster-corrected standard errors based on districts.…”

Nudging Taxpayer Registration?: Field Experimental Evidence on Backfiring Incentives

“…The municipality set up the online registry to update and improve its existing records. 3 Within this strand, the interventions in Brockmeyer et al (2019), Castro and Scartascini (2015), Chirico et al (2016), Chirico et al (2019), Carrillo, Castro, andScartascini (2017), and Eguino and Schächtele (2020) address property taxes. and Wagner, 2019;Jessen and Kluve, 2019).…”

“…Satellite imagery provides administrations with better information about properties at low cost, reducing the cost of registersAli, Deininger, and Wild (2020).6 Lottery incentives for third-party monitoring raised tax compliance in Brazil despite small chances of winning(Naritomi, 2019). In a public reward lottery in Argentina(Carrillo, Castro, and Scartascini, 2017) and a laboratory experiment(Bazart and Pickhardt, 2011), the net revenues of lottery rewards for tax compliance were not necessarily positive. Lottery incentives effectively changed health(Beatty and Katare, 2018;Haisley et al, 2012), transportation(Fabbri, Barbieri, and Bigoni, 2019) and survey participation(Laguilles, Williams, and Saunders, 2011;Singer and Ye, 2013) behavior.…”