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Does Tax Evasion Affect Economic Crime?

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  • Amedeo Argentiero
  • Bruno Chiarini
  • Elisabetta Marzano

Abstract

This paper examines the impact of tax evasion on criminal activities in Italy. Specifically, we consider three types of crime that are related to economic determinants: property crimes (including robbery, theft and car theft), fraud and usury. We estimate a dynamic panel using annual data from the Italian provinces (NUTS-3) for the 2006-2010 period and show that tax evasion positively affects economic crimes. Notably, the elasticity of tax evasion to fraud is related to the size of the tax burden; in addition, these crimes demonstrate different levels of persistence over time, reflecting different adjustment costs. Finally, we find that property crimes, fraud and usury are not influenced by deterrence or clearing-up variables.

Suggested Citation

  • Amedeo Argentiero & Bruno Chiarini & Elisabetta Marzano, 2018. "Does Tax Evasion Affect Economic Crime?," CESifo Working Paper Series 6957, CESifo.
  • Handle: RePEc:ces:ceswps:_6957
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    More about this item

    Keywords

    property crime; usury; fraud; tax evasion; deterrence effect;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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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