Worker or Shirker - Who Evades More Taxes? A Real Effort Experiment

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractWith the help of a real effort experiment, we analyze if tax evasion depends on the amount of effort invested to generate income. In three treatments, subjects were either endowed with income or had to work moderately or hard to earn it. In line with prospect theory, subjects evaded more taxes when they worked hard for their income. We find little evidence for the prediction that tax evasion in the endowed treatment is higher than in the moderate work treatment.

Media negativity bias and tax compliance: experimental evidence

“…Boylan (2010a) found that participants with earned money were more compliant than those benefiting from windfall money before an audit but decreased their compliance after the audit, while the reverse was true for those with endowed money. Other authors found that participants who earn their income through a moderate effort are more likely to comply than those who performed high effort tasks or were exogenously endowed (Bühren & Kundt, 2013;Kirchler et al, 2009). Overall, the available evidence is not conclusive, and we do not have a definite hypothesis on how the origin of income may affect compliance.…”

“…Some studies show that the degree of effort required in experimental tasks could affect compliance behavior (e.g.,Boylan & Sprinkle, 2001;Boylan, 2010b;Durham et al, 2014). Other works find no difference between the behavioral response of subjects who earned their income or were exogenously endowed by experimenters (e.g.,Bühren & Kundt, 2013;Kirchler et al, 2009). AsMalezieux (2018) highlights, the mixed evidence could be caused by interaction effects with other variables like audit probability, tax rate, or gender.…”

Imagine Being a Nice Guy: A Note on Hypothetical vs. Incentivized Social Preferences

“…The participants received a 5.00 EUR show-up fee and gained on average 3.99 EUR (SD = 0.99 EUR) in an unrelated experiment on tax evasion (Bühren and Kundt, 2013). Our participants were afterwards randomly divided into two subgroups: 80 participants made decisions involving real money (incentivized treatment) and 70 made hypothetical choices (hypothetical treatment) in the Fehr et al (2008) DGs.…”