Status Seeking Taxpayer and Tax Evasion

Sugata Marjit, Koushik Hati and Lei Yang

No 12193, CESifo Working Paper Series from CESifo

Abstract: This paper explores whether tax compliance would be affected if the tax payers are “status” seekers. If relative income is a symbol of relative status in a society, status concerned individuals would evade paying taxes more relative to the case where status is not a concern. However, such an outcome would not hold if the symbol of relative status is relative consumption of the “status” good and not relative income. We generalize the scenario by introducing a measure of relative status which depends on both relative income and consumption of the status good.

Keywords: status-seeking behavior; tax evasion; relative income; conspicuous consumption; Inequality (search for similar items in EconPapers)
JEL-codes: D31 D91 H21 H26 O15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12193

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