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The impact of social pressure on tax compliance: A field experiment

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  • Battiston, Pietro
  • Gamba, Simona

Abstract

We study the effect of social pressure on tax compliance, focusing on the compliance of shop sellers to the legal obligation of releasing tax receipts for each sale. We carry out a field experiment on bakeries in Italy, where a strong gap exists between the legal obligation and the actual behavior of sellers. Social pressure is manipulated by means of an explicit request for a receipt when not released. We employ an innovative approach to the identification of the treatment effect. We find that a single request for a receipt causes a 17 per cent rise in the probability of a receipt being released for a sale occurring shortly thereafter, causing on average more than two receipts to be released. We also find strong evidence of persistence in compliance decisions.

Suggested Citation

  • Battiston, Pietro & Gamba, Simona, 2016. "The impact of social pressure on tax compliance: A field experiment," International Review of Law and Economics, Elsevier, vol. 46(C), pages 78-85.
  • Handle: RePEc:eee:irlaec:v:46:y:2016:i:c:p:78-85
    DOI: 10.1016/j.irle.2016.03.001
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    Cited by:

    1. Pietro Battiston & Denvil Duncan & Simona Gamba & Alessandro Santoro, 2016. "The Italian Blitz: a natural experiment on audit publicity and tax compliance," FBK-IRVAPP Working Papers 2016-10, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.

    More about this item

    Keywords

    Tax evasion; Field experiment; Peer pressure; Social pressure;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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