Public Goods, Hidden Income, and Tax Evasion: Some Nonstandard Results from the Warm-Glow Model

Daniel Hungerman

No 19804, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A large literature explores crowd out in situations where public goods are jointly provided; work in this area typically depicts a tax system where individuals take taxes as given. But in some settings, such as those in developing economies, efforts to evade or avoid taxes may be widespread. Using the canonical warm-glow model, this paper considers joint pubic-good provision in a setting where individuals can evade taxes by hiding their income. The model's implications change significantly in this setting: with hidden income, stronger warm glow will lead to greater crowd out, not less. Using research on crowd out and inter-family transfers, I present suggestive evidence that the model's results may help to reconcile divergent estimates of crowd out in the literature.

JEL-codes: H26 H41 O17 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
Note: DEV PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as Hungerman, Daniel M., 2014. "Public goods, hidden income, and tax evasion: Some nonstandard results from the warm-glow model," Journal of Development Economics, Elsevier, vol. 109(C), pages 188-202.

Downloads: (external link)
http://www.nber.org/papers/w19804.pdf (application/pdf)

Related works:
Journal Article: Public goods, hidden income, and tax evasion: Some nonstandard results from the warm-glow model (2014)
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: https://EconPapers.repec.org/RePEc:nbr:nberwo:19804

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w19804

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().