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Does the Level of Work Effort Influence Tax Evasion? Experimental Evidence

Author

Listed:
  • Bühren Christoph

    (University of Kassel, Institute of Economics, Nora-Platiel-Straße 4, 34127 Kassel, Germany)

  • Kundt Thorben C.

    (Helmut-Schmidt-University Hamburg, Economics Department, Holstenhofweg 85, 22043 Hamburg, Germany)

Abstract

Using a real effort experiment, we analyze the dependence of tax evasion on the amount of effort invested to generate income. In three treatments, subjects were either endowed with income or had to work moderately or arduously to earn it. In line with prospect theory, subjects evaded more taxes when they worked hard for their income. We find little evidence for the prediction that tax evasion in the endowed treatment is higher than that in the moderate-effort treatment.

Suggested Citation

  • Bühren Christoph & Kundt Thorben C., 2014. "Does the Level of Work Effort Influence Tax Evasion? Experimental Evidence," Review of Economics, De Gruyter, vol. 65(2), pages 137-158, August.
    • Handle: RePEc:lus:reveco:v:65:y:2014:i:2:p:137-158
    DOI: 10.1515/roe-2014-0203
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    Citations

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    Cited by:

    1. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    2. Christoph Buehren & Maria Daskalakis, 2020. "Which green nudge helps to save energy? Experimental evidence," MAGKS Papers on Economics 202042, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Miloš Fišar & Tommaso Reggiani & Fabio Sabatini & Jiří Špalek, 2020. "Media Bias and Tax Compliance: Experimental Evidence," MUNI ECON Working Papers 2020-01, Masaryk University, revised Feb 2023.
    4. Christoph Bühren & Thorben C. Kundt, 2015. "Imagine being a nice guy: A note on hypothetical vs. incentivized social preferences," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 10(2), pages 185-190, March.
    5. James Alm & Antoine Malézieux, 2021. "40 years of tax evasion games: a meta-analysis," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 699-750, September.
    6. Grundmann, Susanna, 2020. "Do just deserts and competition shape patterns of cheating?," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-79-20, University of Passau, Faculty of Business and Economics.
    7. Choo, C.Y. Lawrence & Fonseca, Miguel A. & Myles, Gareth D., 2016. "Do students behave like real taxpayers in the lab? Evidence from a real effort tax compliance experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 102-114.
    8. Hundsdoerfer, Jochen & Matthaei, Eva Kristina, 2020. "Gender discriminatory taxes, fairness perception, and labor supply," Discussion Papers 2020/6, Free University Berlin, School of Business & Economics.
    9. repec:cup:judgdm:v:10:y:2015:i:2:p:185-190 is not listed on IDEAS
    10. Antoine Malézieux & Benno Torgler, 2021. "Culture, Immigration and Tax Compliance," CREMA Working Paper Series 2021-23, Center for Research in Economics, Management and the Arts (CREMA).
    11. Jochen Hundsdoerfer & Eva Matthaei, 2022. "Gender Discriminatory Taxes, Fairness Perception, and Labor Supply," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 78(1-2), pages 156-207.
    12. Guerra, Alice & Harrington, Brooke, 2018. "Attitude–behavior consistency in tax compliance: A cross-national comparison," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 184-205.
    13. Grundmann, Susanna & Graf Lambsdorff, Johann, 2017. "How income and tax rates provoke cheating – An experimental investigation of tax morale," Journal of Economic Psychology, Elsevier, vol. 63(C), pages 27-42.

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