Income Tax Evasion Dynamics: Evidence from an Agent-based Econophysics Model

Michael Pickhardt and Goetz Seibold

Papers from arXiv.org

Abstract: We analyze income tax evasion dynamics in a standard model of statistical mechanics, the Ising model of ferromagnetism. However, in contrast to previous research, we use an inhomogeneous multi-dimensional Ising model where the local degrees of freedom (agents) are subject to a specific social temperature and coupled to external fields which govern their social behavior. This new modeling frame allows for analyzing large societies of four different and interacting agent types. As a second novelty, our model may reproduce results from agent-based models that incorporate standard Allingham and Sandmo tax evasion features as well as results from existing two-dimensional Ising based tax evasion models. We then use our model for analyzing income tax evasion dynamics under different enforcement scenarios and point to some policy implications.

Date: 2011-12
New Economics Papers: this item is included in nep-cmp, nep-iue and nep-pub
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Income tax evasion dynamics: Evidence from an agent-based econophysics model (2014)
Working Paper: Income Tax Evasion Dynamics: Evidence from an Agent-based Econophysics Model
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1112.0233

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