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Tax compliance is not fundamentally influenced by incidental emotions: An experiment

Abstract

The present study investigates the impact of incidental emotions on tax compliance behavior in an experimental setting. Different theories are divided about how experiencing incidental emotions should influence tax decisions and the few existing studies yield inconsistent results. Our aim was to investigate differences between three specific emotions, namely anger, fear, and happiness. This allowed a comparison in compliance behavior as a function of differences in emotional valence as well as in specific emotional qualities. For this purpose, a sample of 264 individuals participated in a tax experiment. After a baseline treatment, one of the three emotions was induced using video-clips with background music. Moreover, emotional arousal was assessed by measuring electrodermal activity. Manipulation check items as well as elevated arousal levels after the emotion induction provided support for a successful emotion induction. Nevertheless, we did not observe any tax compliance differences between the anger, fear, and happiness conditions. Our results speak against a fundamental role of incidental emotions for tax compliance decisions.

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Data availability

https://osf.io/qych5/.

Code availability

https://osf.io/qych5/.

Notes

  1. 1.

    For the Velten technique, participants are asked to read emotionally laden statements (e.g. “I feel rather sluggish now.”) and are instructed to try to feel the described mood (Westermann et al. 1996).

  2. 2.

    The adapted version of the questionnaire was constructed as follows: The adjectives active, interested, strong, guilty, inspired, proud, irritable, enthusiastic, ashamed, alert, nervous, determined, and attentive from the PANAS were kept unchanged. Furthermore, the adjectives distressed, excited, upset, scared, afraid, hostile, and jittery were removed, while the adjectives sad, happy, stressed, fearful, helpless, angry, and insecure were added.

  3. 3.

    Planned contrasts for the other two emotions revealed significantly higher levels of the respective emotion in comparison to both other conditions. More specifically, the level of the emotion anger in the anger condition was higher compared to the happiness condition, t(261) = − 3.09, p = .002, and higher compared to the fear condition, t(261) = − 3.28, p = .001. Also, the level of the emotion fear in the fear condition was higher compared to the happiness condition, t(261) = − 4.10, p < .001, as well as compared to the anger condition, t(261) = − 3.16, p = .002.

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Acknowledgements

We thank the students of the 2018 theory and empirical research seminar in economic psychology at the Faculty of Psychology, University of Vienna, for their assistance in running the laboratory experiment: Christian Bauer, Lisa Braun, Franziska Flock, David Gritschneder, Viviane Haschka, Armin Jaeger, Benjamin Kirchler, Magdalena Kohlbauer, Lars Materne, Philip Phangthong, Verena Radnitzky, Lucas Sorge, and Benedikt Wilke. We also want to thank Michael Forster and Andreas Gartus for their technical support and advice in analyzing electrodermal activity data.

Funding

We gratefully acknowledge funding by the University of Vienna Förderstipendium.

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Correspondence to Janina Enachescu or Ziga Puklavec.

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Enachescu, J., Puklavec, Z., Olsen, J. et al. Tax compliance is not fundamentally influenced by incidental emotions: An experiment. Econ Gov (2021). https://doi.org/10.1007/s10101-021-00256-9

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Keywords

  • Tax compliance
  • Incidental emotions
  • Experiment
  • Emotion induction
  • Electrodermal activity
  • Arousal

JEL Classification

  • H26