European Journal of Law and Economics

, Volume 18, Issue 3, pp 319–341 | Cite as

Tax Amnesties and the Self-Selection of Risk-Averse Taxpayers

  • Carla MarcheseEmail author
  • Fabio Privileggi


In this paper we model taxpayers participation in an unexpected tax amnesty, which can be entered by paying a fixed amount. Taxpayers are characterized by a Constant Relative Risk Aversion (CRRA) utility function and differ in relative risk aversion coefficient and in income. We show that amnesties may fail as a self-selective device to fully separate big from small evaders and to extract resources from the former. Only taxpayers whose relative risk aversion falls within a given interval participate, while those whose evasion is too small or too large do not enter. The model is used to estimate relative risk aversion and tax evasion of participants in 1991 and 1994 Italian income tax amnesties.


tax amnesty tax evasion relative risk aversion self-selection 


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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.Department of Public Policy and Public Choice PolisUniversity of Eastern PiedmontAlessandriaItaly

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