Social norms and tax compliance: Framing the decision to pay tax
Observed levels of tax compliance are higher than predicted levels (when predictions are based on Allingham and Sandmo's neoclassical model of tax evasion). They are higher if social norms recognise the importance of compliance. But how do social norms frame decisions to pay tax? Can prospect theory be applied to shed insight into the way that social norms exert their influence? An analysis of questionnaire responses (from Italy and from the UK) suggests that they exert their influence by changing the reference points that individuals use when they code changes as ‘gains’, or ‘losses’. The evidence suggests that social norms frame the decision to pay tax by changing individuals’ perceptions of their entitlement to income. This consideration is important when designing policy to deter evasion.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 41 (2012)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/locate/inca/620175|
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.:
- Robert H. Frank & Thomas Gilovich & Dennis T. Regan, 1993. "Does Studying Economics Inhibit Cooperation?," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 159-171, Spring.
- Frey, Bruno S. & Torgler, Benno, 2006.
"Tax Morale and Conditional Cooperation,"
Berkeley Olin Program in Law & Economics, Working Paper Series
qt3rd3f982, Berkeley Olin Program in Law & Economics.
- Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," CREMA Working Paper Series 2006-11, Center for Research in Economics, Management and the Arts (CREMA).
- Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," IEW - Working Papers 286, Institute for Empirical Research in Economics - University of Zurich.
- James Andreoni & Brian Erard & Jonathan Feinstein, 1998.
Journal of Economic Literature,
American Economic Association, vol. 36(2), pages 818-860, June.
- Robert H. Frank & Thomas D. Gilovich & Dennis T. Regan, 1996. "Do Economists Make Bad Citizens?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 187-192, Winter.
- 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.
- Kuran, Timur, 1990. "Private and Public Preferences," Economics and Philosophy, Cambridge University Press, vol. 6(01), pages 1-26, April.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Bernard Fortin & Guy Lacroix & Marie-Claire Villeval, 2007.
"Tax Evasion and Social Interactions,"
- Bernard Fortin & Guy Lacroix & Marie-Claire Villeval, 2004. "Tax Evasion and Social Interactions," Post-Print halshs-00180104, HAL.
- Fortin, Bernard & Lacroix, Guy & Villeval, Marie Claire, 2004. "Tax Evasion and Social Interactions," IZA Discussion Papers 1359, Institute for the Study of Labor (IZA).
- Marie-Claire Villeval & Bernard Fortin & Guy Lacroix, 2005. "Tax Evasion and Social Interactions," Working Papers 0410, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Bernard Fortin & Guy Lacroix & Marie-Claire Villeval, 2004. "Tax Evasion and Social Interactions," Post-Print halshs-00175016, HAL.
- Bernard Fortin & Guy Lacroix & Marie-Claire Villeval, 2004. "Tax Evasion and Social Interactions," CIRANO Working Papers 2004s-61, CIRANO.
- Bernard Fortin & Guy Lacroix & Marie-Claire Villeval, 2004. "Tax Evasion and Social Interactions," Cahiers de recherche 0432, CIRPEE.
- Torgler, Benno, 2003. "To evade taxes or not to evade: that is the question," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(3), pages 283-302, July.
- Alm, James & Jacobson, Sarah, 2007. "Using Laboratory Experimentsin Public Economics," National Tax Journal, National Tax Association, vol. 60(1), pages 129-52, March.
- Stephan Danninger & Alberto Alesina & Massimo V. Rostagno, 1999.
"Redistribution Through Public Employment; The Case of Italy,"
IMF Working Papers
99/177, International Monetary Fund.
- Albert Alesina & Stephan Danninger & Massimo Rostagno, 2001. "Redistribution Through Public Employment: The Case of Italy," IMF Staff Papers, Palgrave Macmillan, vol. 48(3), pages 2.
- Alberto Alesina & Stephan Danninger & Massimo Rostagno, 1999. "Redistribution Through Public Employment: The Case of Italy," NBER Working Papers 7387, National Bureau of Economic Research, Inc.
- Traxler, Christian, 2010.
"Social norms and conditional cooperative taxpayers,"
European Journal of Political Economy,
Elsevier, vol. 26(1), pages 89-103, March.
- Traxler, Christian, 2006. "Social Norms and Conditional Cooperative Taxpayers," Discussion Papers in Economics 1202, University of Munich, Department of Economics.
- Jones, Philip & Hudson, John, 2000. "Civic Duty and Expressive Voting: Is Virtue Its Own Reward?," Kyklos, Wiley Blackwell, vol. 53(1), pages 3-16.
- Baldry, J C, 1984. "The Enforcement of Income Tax Laws: Efficiency Implications," The Economic Record, The Economic Society of Australia, vol. 60(169), pages 156-59, June.
- Schepanski, A. & Shearer, T., 1995. "A Prospect Theory Account of the Income Tax Withholding Phenomenon," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 174-186, August.
- Cullis, John & Jones, Philip & Lewis, Alan, 2006. "Tax framing, Instrumentality and individual differences: Are there two different cultures?," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 304-320, April.
- Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
- Schneider, Friedrich, 2002. "The Size and Development of the Shadow Economies of 22 Transition and 21 OECD Countries," IZA Discussion Papers 514, Institute for the Study of Labor (IZA).
- Robben, Henry S. J. & Webley, Paul & Elffers, Henk & Hessing, Dick J., 1990. "Decision frames, opportunity and tax evasion : An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 14(3), pages 353-361, December.
- Carlo Fiorio & Alberto Zanardi, 2007. ""It's a lot but let it stay" How tax evasion is perceived across Italy," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1048, Universitá degli Studi di Milano.
- Marisa Ratto & Richard Thomas & David Ulph, 2005. "Tax Compliance as a Social Norm and the Deterrent Effect of Investigations," The Centre for Market and Public Organisation 05/127, Department of Economics, University of Bristol, UK.
- Cipriani, Giam Pietro & Lubian, Diego & Zago, Angelo, 2009. "Natural born economists?," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 455-468, June.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eee:soceco:v:41:y:2012:i:2:p:159-168. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.