Carrots, Sticks, or Simplicity? Field Evidence on What Makes People Pay TV Fees

Jana Cahlikova, Lubomir Cingl, Kateřina Chadimová and Miroslav Zajicek

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We provide evidence on both innovative as well as known behavioral strategies aimed at improving tax compliance, using a unified environment of two large correspondence experiments (N=82,599 and N=51,142) with potential TV-fees evaders in the Czech Republic. We (i) simplify the original letter and add a QR code for easier registration; use two innovative text strategies aimed at (ii) the elicitation of preference for fee designation, and (iii) the explanation of fee purpose. We also employ strategies known in the literature but providing mixed results: highlighting (iv) legal consequences of non-compliance, (v) value of services for the fee, and (vi) social norms. Apart from the text treatments, we modify the envelopes by placing there (vii) a picture of a cartoon character (supported by a sticker inside), or (viii) a red inscription "Important", with the aim to stimulate recipients' reciprocity and attention. Our results show that the text simplification and highlighting legal consequences substantially improve effectiveness of the letter, which we self-replicate on a new sample two years later, while the remaining treatments do not improve over the baseline. The QR code brings only a modest improvement.

Keywords: tax compliance; natural experiment; deterrence; simplicity; QR code (search for similar items in EconPapers)
JEL-codes: C91 C93 D02 H24 H26 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2021-07
New Economics Papers: this item is included in nep-env, nep-exp and nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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