Title
The Effects Of Income Source, Context, And Income Level On Tax Compliance Decisions In A Dynamic Experiment
Document Type
Article
Publication Date
2-2014
Publication Source
Journal of Economic Psychology
Volume Number
40
First Page
220
Last Page
233
Publisher
Elsevier Science BV
ISSN
0167-4870
Abstract
This study employs a laboratory experiment to explore the joint effect of income source (earned versus endowed) and decision context (tax versus nontax) on tax compliance behavior. During the experiment, subjects faced various income levels and made multiple reporting decisions. The results indicate that overall compliance is not significantly affected by the interaction of income source and context. However, this joint effect influences the relationship between income level and compliance and how compliance behavior evolves over time. In both cases, the treatment group with earned income in a tax context displays behavior that is distinct from the other three groups.
Keywords
Tax Compliance, Income Source, Context, Income Level, Experiments, House Money, Taxpayer Compliance, Endowment Heterogeneity, Reporting Decisions, Bargaining Games, Sunk Cost, Evasion, Impact, Origin, Choice
Recommended Citation
Durham, Yvonne, Tracy S. Manly, and Christina Ritsema. “The Effects of Income Source, Context, and Income Level on Tax Compliance Decisions in a Dynamic Experiment.” Journal of Economic Psychology, Special Issue on Behavioral Dynamics of Tax Evasion, 40 (February 2014): 220–33. doi:10.1016/j.joep.2012.09.012.
