When Happy People Make Society Unhappy: Emotions Affect Compliance Behavior

57 Pages Posted: 3 Nov 2018 Last revised: 18 Mar 2021

See all articles by Martin Fochmann

Martin Fochmann

Free University of Berlin

Frank Hechtner

Friedrich-Alexander-Universität Erlangen-Nürnberg

Erich Kirchler

University of Vienna - Faculty of Psychology

Peter Mohr

Free University of Berlin (FUB)

Date Written: March 18, 2021

Abstract

Emotions affect judgments and decision making. Our paper presents the first study to show that incidental background emotions (i.e., emotions not related to the actual decision) influence individuals’ tax compliance attitudes and behavior. A large-scale survey of 22,220 German taxpayers and a controlled laboratory experiment provide evidence that positive background emotions reduce willingness to comply compared to aversive (negative) background emotions. The participants in our survey show less favorable tax compliance attitudes on weekends, which are usually associated with more positive background emotions. These findings are supported by the results of a controlled laboratory experiment in which background emotions were induced by standardized pictures. Individuals chose more often to evade taxes after being exposed to positive emotions compared to aversive emotions.

Keywords: Compliance attitudes, compliance behavior, emotions, tax evasion, experimental economics

JEL Classification: C91, D91, H26

Suggested Citation

Fochmann, Martin and Hechtner, Frank and Kirchler, Erich and Mohr, Peter, When Happy People Make Society Unhappy: Emotions Affect Compliance Behavior (March 18, 2021). Available at SSRN: https://ssrn.com/abstract=3259071 or http://dx.doi.org/10.2139/ssrn.3259071

Martin Fochmann (Contact Author)

Free University of Berlin ( email )

Thielallee 73
Accounting and Taxation
Berlin, 14195
Germany

Frank Hechtner

Friedrich-Alexander-Universität Erlangen-Nürnberg ( email )

Lange Gasse 20
Nürnberg, 90403
Germany

Erich Kirchler

University of Vienna - Faculty of Psychology ( email )

Universitaetsstrasse 7
Vienna, A-1010
Austria
+43 1 42 7747332 (Phone)
+43 1 42 7747339 (Fax)

HOME PAGE: http://homepage.univie.ac.at/erich.kirchler

Peter Mohr

Free University of Berlin (FUB) ( email )

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