The effect of church tax on church membership
AbstractIn this study, we examine the effect of church tax on the church membership decision using Finnish data. We present both descriptive statistics from an opting-out website and econometric evidence exploiting the panel structure of a large individual-level data set. Our descriptive analysis shows that opting out is concentrated towards the last days of the year, i.e., the last chance to avoid paying church tax for the entire coming year. Our econometric evidence suggests that the average effect of tax incentives for the whole population is both statistically and economically significant. A 1 standard deviation increase in church tax leads to between 0.5 and 1 percentage point decline in the likelihood of church membership. In addition, we find that church membership dropped substantially when a law change made opting out significantly easier. This finding suggests that transaction costs play an important role in the membership decision. Copyright Springer-Verlag 2013
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Bibliographic InfoArticle provided by Springer in its journal Journal of Population Economics.
Volume (Year): 26 (2013)
Issue (Month): 3 (July)
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Other versions of this item:
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- Z12 - Other Special Topics - - Cultural Economics - - - Religion
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
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