Dubious Versus Trustworthy Faces - What Difference Does it Make for Tax Compliance?
Kai A. Konrad
Max Planck Institute for Tax Law and Public Finance; Social Science Research Center Berlin (WZB); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)
Berlin School of Economics and Law; Wissenschaftszentrum Berlin für Sozialforschung (WZB)
Wissenschaftszentrum Berlin für Sozialforschung (WZB); Max Planck Institute for Tax Law and Public Finance
August 30, 2013
CESifo Working Paper Series No. 4373
We find experimental evidence that the decision problem of tax compliance changes if subjects’ declarations are not randomly assessed, but is based on their appearance as captured by pictures of their faces, even if the aggregate audit probability does not change. Some subjects may fear that their picture looks rather dubious whereas others may believe that their picture looks more trustworthy than average. Depending on these beliefs, they may adjust their compliance decisions. Our experimental design allows to disentangle these potentially countervailing effects.
Number of Pages in PDF File: 12
Keywords: compliance, tax evasion, face picture, audit probability
JEL Classification: H260, C910, H310working papers series
Date posted: September 4, 2013
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