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On the External Validity of Laboratory Tax Compliance Experiments

Listed author(s):
  • James Alm

    ()

    (Department of Economics, Tulane University)

  • Kim M. Bloomquist

    ()

    (Office of Research, U.S. Internal Revenue Service)

  • Michael McKee

    ()

    (Department of Economics, Appalachian State University)

An essential issue for laboratory experiments to inform policy debates is the "external validity" of the experimental results; that is, does behavior in the laboratory apply to behavior that occurs in the naturally occurring world? We examine this issue of external validity in the specific context of laboratory experiments on tax compliance, using two different types of evidence. We find that the behavioral patterns of subjects in the laboratory conform to that of individuals making a similar decision in naturally occurring settings. We also find that the behavioral responses of students are largely the same as non-students in identical experiments.

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File URL: http://econ.tulane.edu/RePEc/pdf/tul1512.pdf
File Function: First Version, March 2015
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Paper provided by Tulane University, Department of Economics in its series Working Papers with number 1512.

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Date of creation: Aug 2015
Handle: RePEc:tul:wpaper:1512
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  3. Smith, Vernon L & Walker, James M, 1993. "Monetary Rewards and Decision Cost in Experimental Economics," Economic Inquiry, Western Economic Association International, vol. 31(2), pages 245-261, April.
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  6. Brian Erard & Chih-Chin Ho, 1999. "Searching for Ghosts: Who Are the Nonfilers nd How Much Tax Do They Owe?," Carleton Economic Papers 99-11, Carleton University, Department of Economics, revised Jul 2001.
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  8. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
  9. Henrik Jacobsen Kleven & Martin B. Knudsen & Claus Thustrup Kreiner & Søren Pedersen & Emmanuel Saez, 2011. "Unwilling or Unable to Cheat? Evidence From a Tax Audit Experiment in Denmark," Econometrica, Econometric Society, vol. 79(3), pages 651-692, 05.
  10. Bigoni, Maria & Camera, Gabriele & Casari, Marco, 2013. "Strategies of cooperation and punishment among students and clerical workers," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 172-182.
  11. Jason F. Shogren & John A. Fox & Dermot J. Hayes & Jutta Roosen, 1999. "Observed Choices for Food Safety in Retail, Survey, and Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1192-1199.
  12. John A. List, 2006. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 1-37, February.
  13. Alm, James & Jackson, Betty & McKee, Michael J., 1992. "Estimating the Determinants of Taxpayer Compliance with Experimental Data," National Tax Journal, National Tax Association, vol. 45(1), pages 107-14, March.
  14. Janie M. Chermak & Kate Krause & David S. Brookshire & H. Stu Burness, 2013. "Moving Forward By Looking Back: Comparing Laboratory Results With Ex Ante Market Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 1035-1049, 01.
  15. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
  16. Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2007. "Estimating Risk Attitudes in Denmark: A Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(2), pages 341-368, 06.
  17. Dina Pomeranz, 2015. "No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax," American Economic Review, American Economic Association, vol. 105(8), pages 2539-2569, August.
  18. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
  19. Alm, James & Jacobson, Sarah, 2007. "Using Laboratory Experimentsin Public Economics," National Tax Journal, National Tax Association, vol. 60(1), pages 129-152, March.
  20. Slemrod, Joel & Blumenthal, Marsha & Christian, Charles, 2001. "Taxpayer response to an increased probability of audit: evidence from a controlled experiment in Minnesota," Journal of Public Economics, Elsevier, vol. 79(3), pages 455-483, March.
  21. James Alm & John Deskins & Michael McKee, 2009. "Do Individuals Comply on Income Not Reported by Their Employer?," Public Finance Review, , vol. 37(2), pages 120-141, March.
  22. Gerlinde Fellner & Rupert Sausgruber & Christian Traxler, 2013. "Testing Enforcement Strategies In The Field: Threat, Moral Appeal And Social Information," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 634-660, 06.
  23. Edward M. Gramlich, 1997. "Reflections of a Policy Economist," The American Economist, , vol. 41(1), pages 22-30, March.
  24. Alm, James & Cherry, Todd L. & Jones, Michael & McKee, Michael, 2012. "Social programs as positive inducements for tax participation," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 85-96.
  25. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  26. Alm, James & McKee, Michael, 2006. "Audit Certainty, Audit Productivity, and Taxpayer Compliance," National Tax Journal, National Tax Association, vol. 59(4), pages 801-816, December.
  27. Erard, Brian & Ho, Chih-Chin, 2001. "Searching for ghosts: who are the nonfilers and how much tax do they owe?," Journal of Public Economics, Elsevier, vol. 81(1), pages 25-50, July.
  28. Alm, James & McKee, Michael, 2004. "Tax compliance as a coordination game," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 297-312, July.
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