The Effects Of Income Source, Context, And Income Level On Tax Compliance Decisions In A Dynamic Experiment
Journal of Economic Psychology
Elsevier Science BV
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.
Tax Compliance, Income Source, Context, Income Level, Experiments, House Money, Taxpayer Compliance, Endowment Heterogeneity, Reporting Decisions, Bargaining Games, Sunk Cost, Evasion, Impact, Origin, Choice
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.