Economics at your fingertips  

Fairness-Adjusted Laffer Curve: Strategy versus Direct Method

Hamza Umer ()
Additional contact information
Hamza Umer: Graduate School of Economics (GSE), Waseda University, Tokyo 169-8555, Japan

Games, 2018, vol. 9, issue 3, 1-14

Abstract: This paper reports results from controlled laboratory experiments on the Laffer curve and explores the productivity differences under the strategy method and the direct method. The data collected in Pakistan show no significant productivity difference across the two methods. The paper argues that the Laffer curve is not the result of a simple leisure—income tradeoff; the disutility of work and perceived unfairness of the tax imposed also influence the work decisions. A behavioral model that incorporates these factors induces a “fairness adjusted” Laffer curve with the negative relationship between tax rate and tax revenue showing up after 54% tax rate.

Keywords: Laffer curve; direct method; strategy method; disutility; fairness; behavioral (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (application/pdf) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Games is currently edited by Prof. Dr. Ulrich Berger

More articles in Games from MDPI, Open Access Journal
Bibliographic data for series maintained by XML Conversion Team ().

Page updated 2019-05-10
Handle: RePEc:gam:jgames:v:9:y:2018:i:3:p:56-:d:161565