Shaming Tax Delinquents

Ricardo Perez-Truglia and Ugo antonio Troiano

No 21264, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many federal and local governments rely on shaming penalties to achieve policy goals, but little is known about how shaming works. Such penalties may be ineffective, or even backfire by crowding out intrinsic motivation. In this paper, we study shaming in the context of the collection of tax delinquencies. We sent letters to 34,334 tax delinquents who owed a total of half a billion dollars in three U.S. states. We randomized some of the information contained in the letter to vary the salience of financial penalties, shaming penalties, and peer comparisons. We then measured the effects of this information on subsequent payment rates, and found that increasing the visibility of delinquency status increases compliance by individuals who have debts below $2,500, but has no significant effect on individuals with larger debt amounts. Financial reminders have a positive effect on payment rates independent of the size of the debt, while information about the delinquency of neighbors has no effect on payment rates.

JEL-codes: H26 H63 K42 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-exp, nep-law and nep-pbe
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Citations: View citations in EconPapers (32)

Published as Ricardo Perez-Truglia & Ugo Troiano, 2018. "Shaming tax delinquents," Journal of Public Economics, vol 167, pages 120-137.

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