Deterrence strength in TV fee enforcement: Field evidence from the Czech Republic

Kateřina Chadimová

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2024, vol. 112, issue C

Abstract: Nudges have been shown to influence behavior across various domains, including tax payments. Although nudges that exploit the deterrence motivation are generally considered most effective, evidence of their effectiveness in terms of the degree of deterrent information included is limited. To address these gaps, we conducted a natural mailing experiment to measure compliance with TV fee payments among a sample of households that failed to respond to an initial communication. In addition to studying the strength of deterrence, our study investigates the impact of treatment timing and content simplification on the compliance rate. The results reveal substantial effects of the strongest deterrent information, resulting in a 25 % increase in the payment registration rate. Treatments with a lower deterrence level did not show improvement from the baseline. We also demonstrate that timing matters, as reminders sent closer to the original response deadline (i.e., earlier) motivate 18 % more households to register for payment. The combined effect of the strongest deterrence and simplification leads to a 59 % increase in registrations. This implies that people are more likely to exhibit compliant behavior when the potential consequences of noncompliance are made more salient, and information is conveyed in a timely and simplified manner.

Keywords: Tax compliance; Field experiment; Deterrence strength; Timing; Simplicity; Nudges (search for similar items in EconPapers)
JEL-codes: C93 D02 H24 H26 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:112:y:2024:i:c:s2214804324000831

DOI: 10.1016/j.socec.2024.102245

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