Nudging for Tax Compliance: A Meta-Analysis

48 Pages Posted: 25 Aug 2020

See all articles by Armenak Antinyan

Armenak Antinyan

Wenlan School of Business; Cardiff University - Cardiff Business School

Zareh Asatryan

ZEW Mannheim

Multiple version iconThere are 2 versions of this paper

Date Written: 2020

Abstract

Tax compliance nudges are used increasingly by governments because of their perceived cost-effectiveness in raising tax revenue. We collect about a thousand treatment effect estimates from 45 randomized controlled trials, and synthesize this rapidly growing literature using meta-analytical methods. We show that interventions pointing to elements of individual tax morale are on average ineffective in curbing tax evasion (when evaluated against a control group of taxpayers receiving neutral communication). In contrast, deterrence nudges - interventions emphasizing traditional determinants of compliance such as audit probabilities and penalty rates - increase compliance. However, their effects are modest in magnitude increasing the probability of compliance by 1.5-2.5 percentage points more than non-deterrence nudges. Our additional results suggest that nudges i) work better on sub-samples of late payers and when delivered in-person, ii) are less effective in the long-run and in lower-income countries, and iii) are somewhat inflated by selective reporting of results.

Keywords: tax compliance, randomized control trials, nudging, tax morale, meta-analysis

JEL Classification: C930, D910, H260

Suggested Citation

Antinyan, Armenak and Asatryan, Zareh, Nudging for Tax Compliance: A Meta-Analysis (2020). CESifo Working Paper No. 8500, Available at SSRN: https://ssrn.com/abstract=3680357 or http://dx.doi.org/10.2139/ssrn.3680357

Armenak Antinyan (Contact Author)

Wenlan School of Business ( email )

No.143, Wuluo Road
Wuhan, Hubei 430073
China

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Zareh Asatryan

ZEW Mannheim ( email )

Mannheim
Germany

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