This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Tax Evasion: Cheating Rationally or Deciding Emotionally?

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Claude Montmarquette () (CIRANO, University of Montreal, Montreal (Quebec), Canada)
Giorgio Coricelli () (CNRS, Centre des Neurosciences Cognitives,Bron, F-69500, France)
Mateus Joffily () (CNRS, Centre des Neurosciences Cognitives,Bron, F-69500, France)
Marie-Claire Villeval () (University of Lyon, Lyon, F-69003, France; CNRS, UMR 5824, GATE, Ecully, F-69130, France; ENS LSH, Lyon, F-69007, France ; Centre Leon Berard, Lyon, F-69003, France)

Additional information is available for the following registered author(s):

Abstract

The economic models of tax compliance predict that individuals should evade taxes when the expected benefit of cheating is greater than its expected cost. When this condition is fulfilled, the high compliance however observed remains a puzzle. In this paper, we investigate the role of emotions as a possible explanation of tax compliance. Our laboratory experiment shows that emotional arousal, measured by Skin Conductance Responses, increases in the proportion of evaded taxes. The perspective of punishment after an audit, especially when the pictures of the evaders are publicly displayed, also raises emotions. We show that an audit policy that induces shame on the evaders favors compliance.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: ftp://ftp.gate.cnrs.fr/RePEc/2007/0724.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 0724.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 40 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:gat:wpaper:0724

Contact details of provider:
Postal: 93, chemin des Mouilles - B.P.167 69131 - Ecully cedex
Phone: 33(0)472 29 30 89
Fax: 33(0)47229 30 90
Web page: http://www.gate.cnrs.fr/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Nelly Wirth).

Related research
Keywords: emotions experiment neuro-economics physiological measures shame tax evasion

Other versions of this item:

Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Ronald G. Cummings & Jorge Martinez-Vazquez & Michael McKee & Benno Torgler, 2007. "Effects of Tax Morale on Tax Compliance: Experimental and Survey Evidence," NCER Working Paper Series 12, National Centre for Econometric Research. [Downloadable!]
    Other versions:
  2. Fortin, Bernard & Lacroix, Guy & Villeval, Marie-Claire, 2004. "Tax Evasion and Social Interactions," IZA Discussion Papers 1359, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Torgler, Benno, 2002. " Speaking to Theorists and Searching for Facts: Tax Morale and Tax Compliance in Experiments," Journal of Economic Surveys, Blackwell Publishing, vol. 16(5), pages 657-83, December. [Downloadable!] (restricted)
  4. Benno Torgler, 2004. "Moral suasion: An alternative tax policy strategy? Evidence from a controlled field experiment in Switzerland," Economics of Governance, Springer, vol. 5(3), pages 235-253, November. [Downloadable!] (restricted)
    Other versions:
  5. Ariel Rubinstein, 2007. "Instinctive and Cognitive Reasoning: A Study of Response Times," Economic Journal, Royal Economic Society, vol. 117(523), pages 1243-1259, October. [Downloadable!] (restricted)
  6. Bosco, Luigi & Mittone, Luigi, 1997. "Tax Evasion and Moral Constraints: Some Experimental Evidence," Kyklos, Blackwell Publishing, vol. 50(3), pages 297-324.
    Other versions:
  7. Yitzhaki, Shlomo, 1974. "Income tax evasion: A theoretical analysis," Journal of Public Economics, Elsevier, vol. 3(2), pages 201-202, May. [Downloadable!] (restricted)
  8. Myles, Gareth D. & Naylor, Robin A., 1996. "A model of tax evasion with group conformity and social customs," European Journal of Political Economy, Elsevier, vol. 12(1), pages 49-66, April. [Downloadable!] (restricted)
  9. Spicer, Michael W. & Thomas, J. Everett, 1982. "Audit probabilities and the tax evasion decision: An experimental approach," Journal of Economic Psychology, Elsevier, vol. 2(3), pages 241-245, September. [Downloadable!] (restricted)
  10. Ralph C Bayer & Matthias Sutter, 2004. "The excess burden of tax evasion - An experimental detection- concealment contest," Experimental 0412003, EconWPA. [Downloadable!]
    Other versions:
  11. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June. [Downloadable!] (restricted)
  12. Wenzel, Michael, 2004. "An analysis of norm processes in tax compliance," Journal of Economic Psychology, Elsevier, vol. 25(2), pages 213-228, April. [Downloadable!] (restricted)
  13. Alm, James & Cronshaw, Mark B & McKee, Michael, 1993. "Tax Compliance with Endogenous Audit Selection Rules," Kyklos, Blackwell Publishing, vol. 46(1), pages 27-45.
  14. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November. [Downloadable!] (restricted)
  15. Alm, James & McClelland, Gary H. & Schulze, William D., 1992. "Why do people pay taxes?," Journal of Public Economics, Elsevier, vol. 48(1), pages 21-38, June. [Downloadable!] (restricted)
  16. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? Each page is provided with a technical contact, in case something is not right with the supplied information. See under "publisher info".

This page was last updated on 2008-10-12.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.