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Compliance Behavior in Networks: Evidence from a Field Experiment

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This paper studies the spread of compliance behavior in neighborhood networks involving over 500,000 households in Austria. We exploit random variation from a field experiment which varied the content of mailings sent to potential evaders of TV license fees. Our data reveal a strong treatment spillover: ‘untreated’ households, who were not part of the experimental sample, are more likely to switch from evasion to compliance in response to the mailings received by their network neighbors. We analyze the spillover within a model of communication in networks based on DeGroot (1974). Consistent with the model, we find that (i) the spillover increases with the treated households’ eigenvector centrality and that (ii) local concentration of equally treated households produces a lower spillover. These findings carry important implications for enforcement policies.

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  • Francesco Drago & Friederike Mengel & Christian Traxler, 2015. "Compliance Behavior in Networks: Evidence from a Field Experiment," CSEF Working Papers 419, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:419
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    Cited by:

    1. Frimmel, Wolfgang & Halla, Martin & Paetzold, Jörg, 2017. "The Intergenerational Causal Effect of Tax Evasion: Evidence from the Commuter Tax Allowance in Austria," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168244, Verein für Socialpolitik / German Economic Association.
    2. repec:eee:pubeco:v:158:y:2018:i:c:p:180-193 is not listed on IDEAS
    3. Brollo, Fernanda & Kaufmann, Katja Maria & Ferrara, Eliana La, 2017. "Learning about the Enforcement of Conditional Welfare Programs: Evidence from Brazil," CAGE Online Working Paper Series 317, Competitive Advantage in the Global Economy (CAGE).
    4. Giulia Mascagni, 2018. "From The Lab To The Field: A Review Of Tax Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 273-301, April.
    5. Paul Carrillo & Edgar Castro & Carlos Scartascini, 2017. "Do Rewards Work?: Evidence from the Randomization of Public Works," IDB Publications (Working Papers) 98459, Inter-American Development Bank.

    More about this item

    Keywords

    neighborhood networks; social learning; spillover; evasion; field experiment.;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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