Customs Compliance and the Power of Imagination

Kai Konrad, Tim Lohse and Salmai Qari

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have reason to imagine that their performance influences their subjective audit probability. In contrast, we do not find evidence for individuals who believe that by their personal performance they can reduce the subjective probability for an audit. Our results suggest that the power of imagination, i.e. the role of second-order beliefs in the process of customs declarations is important and may potentially be used to improve customs and tax compliance.

Keywords: Customs; tax compliance; audit probability; second-order beliefs (search for similar items in EconPapers)
JEL-codes: C91 H26 H31 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011-12
New Economics Papers: this item is included in nep-acc, nep-exp and nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://www.tax.mpg.de/RePEc/mpi/wpaper/Tax-MPG-RPS-2011-18.pdf Full text (original version) (application/pdf)

Related works:
Working Paper: Customs Compliance and the Power of Imagination (2012)
Working Paper: Customs compliance and the power of imagination (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:mpi:wpaper:customs_compliance_and_the_power_of_imagination

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