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Do students behave like real taxpayers in the lab? Evidence from a real effort tax compliance experiment

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  • Choo, C.Y. Lawrence
  • Fonseca, Miguel A.
  • Myles, Gareth D.

Abstract

We report on data from a real-effort tax compliance experiment using three subject pools: students, who do not pay income tax; company employees, whose income is reported by their employer; and self-employed taxpayers, who are responsible for filing and payment. While compliance behavior is unaffected by changes in the level of, or information about the audit probability, higher fines increase compliance. We find subject pool differences: self-assessed taxpayers are the most compliant, while students are the least compliant. Through a simple framing manipulation, we show that such differences are driven by norms of compliance from outside the lab.

Suggested Citation

  • Choo, C.Y. Lawrence & Fonseca, Miguel A. & Myles, Gareth D., 2016. "Do students behave like real taxpayers in the lab? Evidence from a real effort tax compliance experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 102-114.
    • Handle: RePEc:eee:jeborg:v:124:y:2016:i:c:p:102-114
    DOI: 10.1016/j.jebo.2015.09.015
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    More about this item

    Keywords

    Tax compliance; Real effort; Field experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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