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Fighting Income Tax Evasion with Positive Rewards: Experimental Evidence

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  • Cécile Bazart
  • Michael Pickhardt

Abstract

This paper provides experimental evidence regarding the influence of positive rewards on income tax evasion behavior. In particular, we experimentally test the impact of positive rewards in form of individual lottery winnings for honest taxpayers. Among other things, we find that these positive rewards lead to a significantly higher rate of tax compliance. Moreover, there are two gender effects. Males not only evade taxes to a much higher extent than females, they also show a stronger positive response to the lottery scheme. This allows us to draw some interesting policy recommendations.

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File URL: http://www.lameta.univ-montp1.fr/Documents/DR2009-01.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 09-01.

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Length: 32 pages
Date of creation: Jan 2009
Date of revision: Jun 2009
Handle: RePEc:lam:wpaper:09-01

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References

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Citations

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Cited by:
  1. Hokamp, Sascha & Pickhardt, Michael, 2011. "Pareto-optimality in linear public goods games," CAWM Discussion Papers 45, Center of Applied Economic Research Münster (CAWM), University of Münster.
  2. Kastlunger, Barbara & Dressler, Stefan G. & Kirchler, Erich & Mittone, Luigi & Voracek, Martin, 2010. "Sex differences in tax compliance: Differentiating between demographic sex, gender-role orientation, and prenatal masculinization (2D:4D)," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 542-552, August.
  3. Iskandar, Deden Dinar & Wuenscher, Tobias & Badhuri, Anik, 2012. "The Determinants of Compliance on Environmental Tax: The Insights of Theoretical and Experimental Approaches Motivated by the Case of Indonesia," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134977, Agricultural Economics Society.
  4. Iskandar, Deden Dinar & Wuenscher, Tobias, 2012. "Finding the Stronger Impact among Bribery, Financial Reward, and Religious Attitude: The Insights of Experiment on Environmental Tax Compliance in Indonesia," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124316, Australian Agricultural and Resource Economics Society.

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