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Experimental Evidence on Tax Compliance and Voluntary Public Good Provision

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  • Hsu, Li–Chen

Abstract

Existing experimental literature on tax compliance and crowding–out examines either the incentive to evade tax or the incentive to give, but not both. This paper provides an experimental examination of the behavior of tax evasion and voluntary contributions when both publicly and privately provided public goods are present. The experimental evidence suggests that the privately provided public good is a substitute for the publicly provided public good, but the converse does not hold, and that the level of compliance may be underestimated, ceteris paribus, if private contributions are not taken into account.

Suggested Citation

  • Hsu, Li–Chen, 2008. "Experimental Evidence on Tax Compliance and Voluntary Public Good Provision," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(2), pages 205-223, June.
    • Handle: RePEc:ntj:journl:v:61:y:2008:i:2:p:205-23
    DOI: 10.17310/ntj.2008.2.03
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    References listed on IDEAS

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    1. Payne, A. Abigail, 1998. "Does the government crowd-out private donations? New evidence from a sample of non-profit firms," Journal of Public Economics, Elsevier, vol. 69(3), pages 323-345, September.
    2. Andreoni, James, 1993. "An Experimental Test of the Public-Goods Crowding-Out Hypothesis," American Economic Review, American Economic Association, vol. 83(5), pages 1317-1327, December.
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    6. Khanna, Jyoti & Posnett, John & Sandler, Todd, 1995. "Charity donations in the UK: New evidence based on panel data," Journal of Public Economics, Elsevier, vol. 56(2), pages 257-272, February.
    7. James Alm & Michael McKee, 1998. "Extending the lessons of laboratory experiments on tax compliance to managerial and decision economics," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(4-5), pages 259-275.
    8. Andreoni, James, 1988. "Why free ride? : Strategies and learning in public goods experiments," Journal of Public Economics, Elsevier, vol. 37(3), pages 291-304, December.
    9. repec:bla:kyklos:v:48:y:1995:i:1:p:3-18 is not listed on IDEAS
    10. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
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    Cited by:

    1. James Alm & Antoine Malézieux, 2021. "40 years of tax evasion games: a meta-analysis," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 699-750, September.

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