Attitudes, Incentives and Tax Compliance

V.U. Trivedi, Mohamed Shehata and Stuart Mestelman

Department of Economics Working Papers from McMaster University

Abstract: Our study examines whether combining experimental economics and economics psychology techniques can provide a better understanding of individuals’ tax compliance decisions in the laboratory. We find that considering individuals’ attitudinal, personality and intention measures in addition to economic based variables provides a richer understanding of individuals’ actual tax compliance decisions in the laboratory in the face of monetary incentives. We also find that hypothetical and actual compliance decisions in the laboratory are significantly different from each other. Specifically, we find that actual (hypothetical) compliance decisions are significantly influenced by their moral reasoning (anti-establishment) views. Finally, we find that individuals’ actual compliance decisions in the laboratory correlate more significantly with their admission of prior evasion than either their hypothetical compliance decisions or their responses to case scenarios. The latter result, coupled with the lack of appropriate field data on tax compliance, indicates that actual compliance decisions in the laboratory in the face of monetary incentives and with the use of tax terms in the instructions may be an ideal method of obtaining data on individuals’ tax compliance.

JEL-codes: H27 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2004-08
New Economics Papers: this item is included in nep-acc and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Attitudes, Incentives, and Tax Compliance (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2004-08

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