When You Know Your Neighbour Pays Taxes: Information, Peer Effects, and Tax Compliance
dc.contributor.author | Alm, James | |
dc.contributor.author | Bloomquist, Kim M. | |
dc.contributor.author | McKee, Michael | |
dc.date.accessioned | 2017-12-07T22:08:35Z | |
dc.date.accessioned | 2022-07-11T21:37:09Z | |
dc.date.available | 2017-12-07T22:08:35Z | |
dc.date.available | 2022-07-11T21:37:09Z | |
dc.date.copyright | 2016 | |
dc.date.issued | 2017 | |
dc.description.abstract | In this paper, we suggest that individuals’ tax compliance behaviours are affected by the behaviour of their “neighbours”, or those about whom they may have information, whom they may know, or with whom they may interact on a regular basis. Individuals are more likely to file and to report their taxes when they believe that other individuals are also filing and reporting their taxes; conversely, when individuals believe that others are cheating on their taxes, they may well become cheaters themselves. We use experimental methods to test the role of such information about peer effects on compliance behaviour. In one treatment setting, we inform individuals about the frequency that their neighbours submit a tax return. In a second treatment setting, we inform them about the number of their neighbours who are audited, together with the penalties that they pay. In both cases, we examine the impact of information on filing behaviour and also on subsequent reporting behaviour. We find that providing information on whether one’s neighbours are filing returns and/or reporting income has a statistically significant and economically large impact on individual filing and reporting decisions. However, this “neighbour” information does not always improve compliance, depending on the exact content of the information. | en_NZ |
dc.format | en_NZ | |
dc.identifier.uri | https://ir.wgtn.ac.nz/handle/123456789/20299 | |
dc.language.iso | en_NZ | |
dc.publisher | Te Herenga Waka—Victoria University of Wellington | en_NZ |
dc.relation.ispartofseries | Working Papers in Public Finance ; 04/2017 | en_NZ |
dc.rights.rightsholder | www.victoria.ac.nz/sacl/about/cpf | en_NZ |
dc.subject | Tax evasion | en_NZ |
dc.subject | Tax compliance | en_NZ |
dc.subject | Behavioural economics | en_NZ |
dc.subject | Experimental economics | en_NZ |
dc.title | When You Know Your Neighbour Pays Taxes: Information, Peer Effects, and Tax Compliance | en_NZ |
dc.type | Text | en_NZ |
vuwschema.contributor.unit | School of Accounting and Commercial Law | en_NZ |
vuwschema.subject.anzsrcfor | 140215 Public Economics - Taxation and Revenue | en_NZ |
vuwschema.subject.anzsrcforV2 | 380115 Public economics - taxation and revenue | en_NZ |
vuwschema.type.vuw | Working or Occasional Paper | en_NZ |