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Prospect Theory And Factors Affecting Tax Compliance

Author

Listed:
  • Erhan Çelik

    (ALANYA ALAADDIN KEYKUBAT UNIVERSITY)

  • İsa Sağbaş

    (AFYON KOCATEPE UNIVERSITY)

Abstract

Prospect theory claims that psychological factors are also effective in individuals' decisions. Empirical studies conducted with the perspective of prospect theory show that besides the economic and financial factors that affect tax compliance, non-economic factors are also effective. Numerous behavioral finance studies have been conducted showing that psychology is also important in taxpayers' attitudes and behaviors towards taxes. In this study, it is aimed to determine the factors affecting tax compliance within the scope of prospect theory. The data obtained by questionnaire from 817 participants were analyzed with the Tobit regression model. The findings obtained from the study show that the assumptions of the prospect theory are effective in tax compliance and individuals with high loss aversion rate are willing to pay less tax than those with low

Suggested Citation

  • Erhan Çelik & İsa Sağbaş, 2023. "Prospect Theory And Factors Affecting Tax Compliance," Ekonomi Maliye Isletme Dergisi, Adil AKINCI, vol. 6(1), pages 1-21, July.
    • Handle: RePEc:gnx:emid43:2023-6-1-1240981
    DOI: 10.46737/emid.1240981
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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