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Empathy, Sympathy, and Tax Compliance

Author

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  • Roberta Calvet

    () (Department of Business Management and Communication, Lesley University)

  • James Alm

    () (Department of Economics, Tulane University)

Abstract

This paper examines the effect of "empathy" and "sympathy" on tax compliance. We run a series of laboratory experiments in which we observe the subjects' decisions in a series of one-shot tax compliance games presented at once and with no immediate feedback. Importantly, we employ methods to identify subjects' sympathy, such as the Davis Empathic Concern Scale and questions about frequency of prosocial behaviors; we also use priming in order to promote subjects' empathy. Our results suggest that the presence of sympathy in most cases encourages more tax compliance. Our results also suggest that priming to elicit empathy also has a positive impact on tax compliance. These results support the inclusion of noneconomic factors in the analysis of tax compliance behavior.

Suggested Citation

  • Roberta Calvet & James Alm, 2013. "Empathy, Sympathy, and Tax Compliance," Working Papers 1310, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:1310
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    References listed on IDEAS

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    Cited by:

    1. Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.
    2. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    3. Blaufus, Kay & Braune, Matthias & Hundsdoerfer, Jochen & Jacob, Martin, 2015. "Does legality matter? The case of tax avoidance and evasion," Discussion Papers 2015/23, Free University Berlin, School of Business & Economics.
    4. James Alm, 2014. "Expanding the theory of tax compliance from individual to group motivations," Chapters,in: A Handbook of Alternative Theories of Public Economics, chapter 12, pages 260-277 Edward Elgar Publishing.
    5. Mascagni, Giulia, 2016. "From the Lab to the Field: a Review of Tax Experiments," Working Papers 8967, Institute of Development Studies, International Centre for Tax and Development.
    6. Hallsworth, Michael & List, John A. & Metcalfe, Robert D. & Vlaev, Ivo, 2017. "The behavioralist as tax collector: Using natural field experiments to enhance tax compliance," Journal of Public Economics, Elsevier, vol. 148(C), pages 14-31.
    7. Blaufus, Kay & Hundsdoerfer, Jochen & Jacob, Martin & Sünwoldt, Matthias, 2016. "Does legality matter? The case of tax avoidance and evasion," Journal of Economic Behavior & Organization, Elsevier, vol. 127(C), pages 182-206.
    8. International Monetary Fund, 2016. "Albania; Selected Issues," IMF Staff Country Reports 16/143, International Monetary Fund.
    9. Rosella Levaggi & Francesco Menoncin, 2015. "Dynamic Tax Evasion with Audits based on Conspicuous Consumption," Working papers 33, Società Italiana di Economia Pubblica.
    10. James Alm, 2014. "Does an uncertain tax system encourage üaggressive tax planningý?," Economic Analysis and Policy, Elsevier, vol. 44(1), pages 30-38.
    11. Blaufus, Kay & Braune, Matthias & Hundsdoerfer, Jochen & Jacob, Martin, 2015. "Does legality matter? The case of tax avoidance and evasion," arqus Discussion Papers in Quantitative Tax Research 193, arqus - Arbeitskreis Quantitative Steuerlehre.
    12. Rosella Levaggi & Francesco Menoncin, 2016. "Dynamic tax evasion with audits based on visible consumption," Journal of Economics, Springer, vol. 119(2), pages 131-146, October.

    More about this item

    Keywords

    Tax evasion; Emotions; Morality; Identity; Behavioral economics; Experimental economics;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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