Taxpayers Attitudes Toward Risk and Amnesty Participation: Economic Analysis and Evidence for the Italian Case

Carla Marchese () and Fabio Privileggi

POLIS Working Papers from Institute of Public Policy and Public Choice - POLIS

Abstract: This paper provides a simple model, based on expected utility theory, for rationalizing taxpayer's reaction to an unexpected amnesty offer. The model is estimated through a deterministic approach, with reference to data pertaining to the 1991 and 1994 Italian tax amnesties. Results seem sound and suggest that standard critiques to the use of expected utility theory for describing taxpayer behavior do not apply when participation in amnesties is considered. However, the model fails in explaining the behavior of full compliers (who refuse the amnesty). Their behavior can be better rationalized by resorting to the expected utility with rank dependent probability approach.

Keywords: tax amnesty; plea bargaining; risk aversion; Italian tax system (search for similar items in EconPapers)
JEL-codes: D81 H26 H31 (search for similar items in EconPapers)
Pages: 14 pages
Date: 1999-07
New Economics Papers: this item is included in nep-cdm and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Journal Article: Taxpayers' Attitudes toward Risk and Amnesty Participation: Economic Analysis and Evidence for the Italian Case (1997)
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