We run a large-scale natural field experiment to evaluate alternative strategies to enforce compliance with the law. The experiment varies the text of mailings sent to potential evaders of TV license ...fees. We find a strong effect of mailings, leading to a substantial increase in compliance. Among different mailings, a threat treatment which makes a high detection risk salient has a significant deterrent effect. Neither appealing to morals nor imparting information about others' behavior enhances compliance on aggregate. However, the information condition has a weak positive effect in municipalities where evasion is believed to be common.
Abstract
We estimate the effect of the level of fines on payment compliance and revenues collected from speeding tickets. Exploiting discontinuous increases in fines at speed cutoffs and ...reform-induced variation in these discontinuities, we implement two complementary regression discontinuity designs. The results consistently document small payment responses: a 10% increase in the fine (i.e., the payment obligation) induces a 1.2 percentage point decline in timely payments. The implied revenue elasticity is about 0.9. Expressed in absolute terms, a one-dollar increase in the fine translates into a roughly 60-cent increase in payments collected within 15 days (JEL H27, H26, K42).
This paper incorporates tax morale into the Allingham and Sandmo (1972) model of income tax evasion. Tax morale is modeled as a social norm for tax compliance. The strength of the norm is shaped ...endogenously, depending on the share of evaders in the society. Taxpayers act conditionally cooperative as their evasion depends on the others' compliance. We characterize the equilibrium which accounts for this interdependence and study the implications for tax and enforcement policies. The analysis is extended to the case of a society consisting of heterogenous communities. Individual evasion decisions are then embedded in a complex social structure and behavior is influenced by the norm compliance among morale reference groups. Within this framework, we highlight the role of belief management as an alternative policy tool.
Although legal sanctions are often nondeterrent, we frequently observe compliance with “mild laws.” A possible explanation is that the incentives to comply are shaped not only by legal, but also by ...social sanctions. This paper employs a novel experimental approach to study the link between legal and social norm enforcement. We analyze whether the two institutions are complements or substitutes. Our results show that legal sanctions partially crowd out social norm enforcement. Mild laws nevertheless give scope for a potentially large, positive welfare effect, as a higher level of compliance is achieved at lower social enforcement costs.
Nudges at the dentist Altmann, Steffen; Traxler, Christian
European economic review,
11/2014, Letnik:
72
Journal Article
Recenzirano
Odprti dostop
We implement a field experiment to study the impact of reminder messages on dental health prevention. Patients who are due to schedule a check-up receive no reminder, a neutral reminder postcard, or ...reminders including additional information on the benefits of prevention. Our results document a strong impact of reminders. Within one month after receiving a reminder, the fraction of patients who make a check-up appointment more than doubles. The effect declines slightly over time, but remains economically and statistically significant. Including additional information in the reminders does not significantly increase response rates relative to the neutral reminder. Finally, our data indicates that applying reminders repeatedly neither strengthens nor weakens their effects.
•Reminder messages have a strong causal impact on the frequency of dental check-ups.•Reminder effects are persistent over time and observed for a wide range of patient subgroups.•Including additional information about the benefits of prevention does not significantly increase response rates relative to a neutral reminder.•Being exposed to reminders repeatedly neither strengthens nor weakens their effectiveness.
We analyze a series of trials that randomly assigned Wikipedia users in Germany to different web banners soliciting donations. The trials varied framing or content of social information about how ...many other users are donating. Framing a given number of donors in a negative way increased donation rates. Variations in the communicated social information had no detectable effects. The findings are consistent with the results from a survey experiment. In line with donations being strategic substitutes, the survey documents that the negative framing lowers beliefs about others’ donations. Varying the social information, in contrast, is ineffective in changing average beliefs.
ENFORCEMENT SPILLOVERS Rincke, Johannes; Traxler, Christian
The review of economics and statistics,
11/2011, Letnik:
93, Številka:
4
Journal Article
Recenzirano
This paper identifies spillovers from law enforcement. Our approach makes use of microdata on compliance with TV license fees that allow us to distinguish between households that were subject to ...enforcement and those that were not. Using snowfall as an instrument for local inspections, we find a striking response of households to increased enforcement in their vicinity: on average, three detections make one additional household comply with the law. As compliance rises significantly among those who had no exposure to field inspections, our findings establish a sizable externality in enforcement.
Compliance Behavior in Networks Drago, Francesco; Mengel, Friederike; Traxler, Christian
American economic journal. Applied economics,
04/2020, Letnik:
12, Številka:
2
Journal Article
Recenzirano
Odprti dostop
This paper studies the spread of compliance behavior in neighborhood networks in Austria. We exploit a field experiment that varied the content of mailings sent to potential evaders of TV license ...fees. The data reveal a strong treatment spillover: untreated households are more likely to switch from evasion to compliance in response to mailings received by their network neighbors. Digging deeper into the properties of the spillover, we find that it is concentrated among close neighbors of the targets and increases with the treated households’ diffusion centrality. Local concentration of equally treated households implies a lower spillover.
A benchmark result in the political economy of taxation is that majority voting over a linear income tax schedule will result in an inefficiently high tax rate whenever the median voter has a ...below-average income. The present paper examines the role of tax avoidance for this welfare result. For a right-skewed distribution of taxed income, we show that the political distortion from majority voting is increasing in the median voter's avoidance. Vice versa, keeping the decisive voter's avoidance constant, the political inefficiency is decreasing in the average level of avoidance in the economy.
► This paper examines the role of tax avoidance for the welfare assessment of majority voting over a linear income tax schedule. ► For a right-skewed distribution of taxed income, the political distortion from majority voting is increasing in the median voter's avoidance. ► Keeping the decisive voter's avoidance constant, the inefficiency is decreasing in the average level of avoidance in the economy. ► The findings generalize to other behavioral responses to taxation, including the choice of leisure.
PDF
