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On the path dependence of tax compliance


  • Bruttel, Lisa
  • Friehe, Tim


This paper presents experimental evidence that tax compliance is path dependent. For given values of the audit probability and the fine for tax evasion, we compare the income declaration of subjects who faced a change in one of the two parameters to that of subjects who experienced no such parameter change. We show that past tax enforcement regimes continue to have an impact on current income declarations. This finding may be explained by reference-dependent preferences and it has important policy implications. For instance, legal transplants cannot be expected to reliably yield similar behavior in countries with different legal histories.

Suggested Citation

  • Bruttel, Lisa & Friehe, Tim, 2014. "On the path dependence of tax compliance," European Economic Review, Elsevier, vol. 65(C), pages 90-107.
  • Handle: RePEc:eee:eecrev:v:65:y:2014:i:c:p:90-107 DOI: 10.1016/j.euroecorev.2013.11.002

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    Cited by:

    1. Cagala, Tobias & Glogowsky, Ulrich & Rincke, Johannes, 2014. "A field experiment on intertemporal enforcement spillovers," Economics Letters, Elsevier, vol. 125(2), pages 171-174.
    2. Lisa Bruttel & Tim Friehe, 2011. "Path dependence in public-good games," TWI Research Paper Series 67, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    3. Kogler, Christoph & Mittone, Luigi & Kirchler, Erich, 2016. "Delayed feedback on tax audits affects compliance and fairness perceptions," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 81-87.
    4. Kamm, Aaron & Koch, Christian & Nikiforakis, Nikos, 2017. "The ghost of institutions past: History as an obstacle to fighting tax evasion," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168271, Verein für Socialpolitik / German Economic Association.

    More about this item


    Tax compliance; Path dependence; Reference dependence; Experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law


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