Grosswage illusion in a real effort experiment

Martin Fochmann (), Joachim Weimann (), Kay Blaufus (), Jochen Hundsdoerfer () and Dirk Kiesewetter
Additional contact information
Martin Fochmann: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg
Joachim Weimann: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg
Kay Blaufus: Free University of Frankfurt (Oder)
Jochen Hundsdoerfer: Free University Berlin

No 100009, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: In a controlled laboratory experiment, subjects had to fold letters in order to earn money. While the net income per letter was the same in the three treatments, the gross income varied and the tax rate was 0, 25% and 50%. Although work incentives should be the same in all treatments, subjects worked harder and longer when they were taxed. We conclude that this is due to a ‘gross-wage illusion effect’. The existence of this effect demonstrates that not only the tax rate and the tax base are of importance for work incentives, but also the perception of a tax.

JEL-codes: C91 H2 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2010-02
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2010_Dateien/2010_09.pdf First version, 2010 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.ww.uni-magdeburg.de:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mag:wpaper:100009

Access Statistics for this paper

More papers in FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management Contact information at EDIRC.
Bibliographic data for series maintained by Guido Henkel ().