Shaming Tax Delinquents: Evidence from a Field Experiment in the United States

Ricardo Perez-Truglia

Microsoft Research

Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

April 1, 2016

Many federal and local governments rely on shaming penalties to achieve policy goals, but little is known about whether these penalties work as intended. Shaming penalties may be ineffective or may backfire by crowding-out intrinsic motivation. In this paper, we measure the effects of shaming penalties in the collection of tax delinquencies. We sent letters to 34,344 tax delinquents who owed half a billion dollars in three U.S. states. We randomized some of the information contained in the letter to vary the salience of financial penalties, shaming penalties and peer comparisons. We then measure the effects of this information on subsequent re-payment rates. We find that shaming penalties have a large effect on repayment of smaller debt amounts, but no effect on larger debt amounts. Also, financial reminders increase re-payment rates, but peer comparisons are ineffective.

Number of Pages in PDF File: 66

Keywords: tax debt, enforcement, financial, shaming, penalty

JEL Classification: C93, H26, K34, K42, Z13

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Date posted: February 1, 2015 ; Last revised: June 1, 2016

Suggested Citation

Perez-Truglia, Ricardo and Troiano, Ugo, Shaming Tax Delinquents: Evidence from a Field Experiment in the United States (April 1, 2016). Available at SSRN: http://ssrn.com/abstract=2558115 or http://dx.doi.org/10.2139/ssrn.2558115

Contact Information

Ricardo Perez-Truglia
Microsoft Research ( email )
One Memorial Drive, 14th Floor
Cambridge, MA 02142
United States
HOME PAGE: http://research.microsoft.com/en-us/people/rtruglia/
Ugo Troiano (Contact Author)
University of Michigan at Ann Arbor - Department of Economics ( email )
611 Tappan Street
Ann Arbor, MI 48109-1220
United States
HOME PAGE: http://sites.google.com/a/umich.edu/troiano
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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