Rank-Dependent Utility, Tax Evasion, and Labor Supply
AbstractIn a portfolio model of tax evasion an expected utility maximizer will cheat more than what is estimated in empirical studies. At least two types of explanation have been suggested as solutions to this puzzle: (1) taxpayers act according to some unexpected utility theory, and (2) individual ethical norms and social stigma induce people not to cheat. Based on Norwegian survey data, we find that a rank-dependent expected-utility model performs better than an expected-utility model and that social norms matter in explaining behavior.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 67 (2011)
Issue (Month): 3 (September)
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Other versions of this item:
- Erling Eide & Kristine von Simson & Steinar Strøm, 2010. "Rank Dependent Utility, Tax Evasion and Labor Supply," CESifo Working Paper Series 3213, CESifo Group Munich.
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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