Life Satisfaction and Tax Morale in Azerbaijan: Mediating Role of Institutional Trust and Financial Satisfaction

Orkhan Nadirov, Khatai Aliyev, Bruce Dehning, Ilaha Sharifzada and Rafiga Aliyeva
Additional contact information
Bruce Dehning: Argyros School of Business and Economics, Chapman University, One University Drive, Orange, CA 92866, USA
Ilaha Sharifzada: Ernst&Young Holdings (CIS) B.V., Baku AZ1010, Azerbaijan
Rafiga Aliyeva: Department of Finance and Economic Theory, Azerbaijan State Agriculture University (ASAU), Ataturk Avenue 450, Ganja AZ2000, Azerbaijan

Sustainability, 2021, vol. 13, issue 21, 1-10

Abstract: This paper examines the relationship between life satisfaction (measured as the self-reported satisfaction of each individual with their past life and goal achievements) and tax morale (measured as the likelihood of an individual’s intrinsic motivation to pay taxes). Using a large-scale survey dataset from Azerbaijan, it is documented that life satisfaction is positively associated with tax morale. Life satisfaction plays a significant role in increasing tax compliance practices. It is also important to note that there is a positive mediating effect of life satisfaction on tax morale through financial satisfaction and institutional trust. In line with our hypotheses, the results of a series of analyses remain robust to different models. These results imply that a higher level of life satisfaction may increase the proportion of individuals who report the highest tax morale in Azerbaijan. Our findings have policy implications for Azerbaijan and other governments aiming to alleviate high levels of tax evasion.

Keywords: life satisfaction; tax morale; institutional trust; financial satisfaction; Azerbaijan (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:21:p:12228-:d:672943

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