Biased effects of taxes and subsidies on portfolio choices
AbstractWe study how taxes and subsidies affect portfolio choices in a laboratory experiment. We find highly significant differences after intervention, even though the net income is identical in all our treatments and thus the decision pattern of investors should be constant. In particular, we observe that the willingness to invest in the risky asset decreases markedly when an income tax has to be paid or when a subsidy is paid. If we combine both a tax and a subsidy, this effect intensifies. --
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Bibliographic InfoPaper provided by arqus - Arbeitskreis Quantitative Steuerlehre in its series arqus Discussion Papers in Quantitative Tax Research with number 138.
Date of creation: 2012
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tax perception; risk-taking behavior; portfolio choice; distorting taxation; tax; subsidy; behavioral economics;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-12-06 (Accounting & Auditing)
- NEP-ALL-2012-12-06 (All new papers)
- NEP-EXP-2012-12-06 (Experimental Economics)
- NEP-PBE-2012-12-06 (Public Economics)
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