Tax evasion and social information: an experiment in Belgium, France, and the Netherlands
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We experimentally study how receiving information about tax compliance of others affects individuals’ occupational choices and subsequent evading decisions. In one treatment individuals receive information about the highest tax evasion rates of others in past experimental sessions with no such social information; in another treatment they receive information about the lowest tax evasion rates observed in the past sessions with no such social information. We observe an asymmetric effect of social information on tax compliance. Whereas examples of high compliance do not have any disciplining effect, we find evidence that examples of low compliance significantly increase tax evasion for certain audit probabilities. No major differences are found across countries.
KeywordsTax evasion Social interactions Peer effects Cross-country comparisons Experiments
JEL ClassificationH26 D83 C91
The authors are grateful to Sylvain Ferriol for programming the experiment. They wish to thank Frederic De Wispelaer, Jozef Pacolet, and Sergio Perelman for their help in the implementation of the experiments as well as two anonymous referees for their very helpful comments and suggestions. Financial support from Belgian Science Policy (SUBLEC AG/JJ/137) and from the Belgium’s French Community (ARC 05/10-332) is gratefully acknowledged.
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