IDEAS home Printed from https://ideas.repec.org/p/hhs/ifauwp/2007_017.html
   My bibliography  Save this paper

The information method - theory and application

Author

Listed:
  • Engström, Per

    (Nationalekonomiska institutionen)

  • Hesselius, Patrik

    (IFAU - Institute for Labour Market Policy Evaluation)

Abstract

When estimating the extent of e.g. excess use of public benefits one traditionally uses direct monitoring. Such direct estimates are afflicted with an intrinsic negative bias since you only count what you find. This paper presents and assesses an alternative intuitive, yet relatively unexplored, approach that may reduce the bias by making use of the individual's own response to information of increased monitoring. Through an extensive randomized social experiment we apply the method to one particular Swedish public benefit: Parental Benefit for Temporary Childcare. In our view the application was successful: the results are interpretable and we are able to surface more hidden excess use through the information method. As a rough estimate we find that the information based estimate of excess use is 40 percent higher than the corresponding estimate based on ordinary random monitoring (22.5 percent compared to 16 percent). The method is potentially applicable to a large number of related fields, such as e.g. tax evasion and insurance fraud.

Suggested Citation

  • Engström, Per & Hesselius, Patrik, 2007. "The information method - theory and application," Working Paper Series 2007:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2007_017
    as

    Download full text from publisher

    File URL: http://www.ifau.se/upload/pdf/se/2007/wp07-17.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, August.
    2. Engström, Per & Hesselius, Patrik & Persson, Malin, 2007. "Excess use of Temporary Parental Benefit," Working Paper Series 2007:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Lindsay M. Tedds, 2004. "Nonparametric expenditure-based estimation of income under-reporting and the underground economy," Department of Economics Working Papers 2004-17, McMaster University.
    4. Coleman, Stephen, 1996. "The Minnesota income tax compliance experiment: State tax results," MPRA Paper 4827, University Library of Munich, Germany.
    5. Slemrod, Joel & Blumenthal, Marsha & Christian, Charles, 2001. "Taxpayer response to an increased probability of audit: evidence from a controlled experiment in Minnesota," Journal of Public Economics, Elsevier, vol. 79(3), pages 455-483, March.
    6. Gary Burtless, 1995. "The Case for Randomized Field Trials in Economic and Policy Research," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 63-84, Spring.
    7. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
    8. Per Engstrom & Bertil Holmlund, 2009. "Tax evasion and self-employment in a high-tax country: evidence from Sweden," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2419-2430.
    9. Pissarides, Christopher A. & Weber, Guglielmo, 1989. "An expenditure-based estimate of Britain's black economy," Journal of Public Economics, Elsevier, vol. 39(1), pages 17-32, June.
    10. Bertil Holmlund, 1998. "Unemployment Insurance in Theory and Practice," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 113-141, March.
    11. repec:bla:scandj:v:100:y:1998:i:1:p:113-41 is not listed on IDEAS
    12. Hesselius, Patrik & Johansson, Per & Larsson, Laura, 2005. "Monitoring sickness insurance claimants: evidence from a social experiment," Working Paper Series 2005:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    13. John Hasseldine & Peggy Hite & Simon James & Marika Toumi, 2007. "Persuasive Communications: Tax Compliance Enforcement Strategies for Sole Proprietors," Contemporary Accounting Research, John Wiley & Sons, vol. 24(1), pages 171-194, March.
    14. Sandmo, Agnar, 2005. "The Theory of Tax Evasion: A Retrospective View," National Tax Journal, National Tax Association;National Tax Journal, vol. 58(4), pages 643-663, December.
    15. Stijn Viaene & Guido Dedene, 2004. "Insurance Fraud: Issues and Challenges," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 29(2), pages 313-333, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dina Pomeranz, 2015. "No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax," American Economic Review, American Economic Association, vol. 105(8), pages 2539-2569, August.
    2. Engström, Per & Hesselius, Patrik & Persson, Malin, 2007. "Excess use of Temporary Parental Benefit," Working Paper Series 2007:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Appelgren, Leif, 2020. "A survey of models for determining optimal audit strategies," Advances in accounting, Elsevier, vol. 48(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Castro, Lucio & Scartascini, Carlos, 2015. "Tax compliance and enforcement in the pampas evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 65-82.
    2. Per Engstrom & Bertil Holmlund, 2009. "Tax evasion and self-employment in a high-tax country: evidence from Sweden," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2419-2430.
    3. Dina Pomeranz & José Vila-Belda, 2019. "Taking State-Capacity Research to the Field: Insights from Collaborations with Tax Authorities," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 755-781, August.
    4. Ortega, Daniel & Scartascini, Carlos, 2015. "Don't Blame the Messenger: A Field Experiment on Delivery Methods for Increasing Tax Compliance," IDB Publications (Working Papers) 7284, Inter-American Development Bank.
    5. Dina Pomeranz, 2017. "Impact Evaluation Methods in Public Economics," Public Finance Review, , vol. 45(1), pages 10-43, January.
    6. Müller, Kai-Uwe & Oschmiansky, Frank, 2006. "Die Sanktionspolitik der Arbeitsagenturen nach den Hartz-Reformen: Analyse der Wirkungen des Ersten Gesetztes für moderne Dienstleistungen am Arbeitsmarkt," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2006-116, WZB Berlin Social Science Center.
    7. Bjørkheim, Julie Brun & Nygård, Odd E., 2024. "Gender Differences in Tax Evasion: Evidence from Norwegian Administrative Data," Discussion Papers 2024/8, Norwegian School of Economics, Department of Business and Management Science.
    8. Peter John & Toby Blume, 2018. "How best to nudge taxpayers? The impact of message simplification and descriptive social norms on payment rates in a central London local authority," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 1(1).
    9. Felix Schmutz, 2016. "Measuring the Invisible: An Overview of and Outlook for Tax Non-Compliance Estimates and Measurement Methods for Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 152(II), pages 125-177, June.
    10. Daniel Ortega & Carlos Scartascini, 2015. "Don't Blame the Messenger: A Field Experiment on Delivery Methods for Increasing Tax Compliance," IDB Publications (Working Papers) 91741, Inter-American Development Bank.
    11. Engström, Per & Hesselius, Patrik & Persson, Malin, 2007. "Excess use of Temporary Parental Benefit," Working Paper Series 2007:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Antinyan, Armenak & Asatryan, Zareh, 2019. "Nudging for tax compliance: A meta-analysis," ZEW Discussion Papers 19-055, ZEW - Leibniz Centre for European Economic Research.
    13. Tomas Lichard & Jan Hanousek & Randall K. Filer, 2012. "Measuring the Shadow Economy: Endogenous Switching Regression with Unobserved Separation," Economics Working Paper Archive at Hunter College 438, Hunter College Department of Economics.
    14. Sebastian Eichfelder & Chantal Kegels, 2012. "Compliance costs caused by agency action? Empirical evidence and implications for tax compliance," Schumpeter Discussion Papers sdp12005, Universitätsbibliothek Wuppertal, University Library.
    15. Laura L. Leets & Amber Sprenger & Robert O. Hartman & Nicholas W. Kohn & Juli Simon Thomas & Chrissy T. Vu & Sandi Aguirre & Sanith Wijesinghe, 2020. "Effectiveness of nudges on small business tax compliance behavior," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(2).
    16. Gangl, Katharina & Torgler, Benno & Kirchler, Erich & Hofmann, Eva, 2014. "Effects of supervision on tax compliance: Evidence from a field experiment in Austria," Economics Letters, Elsevier, vol. 123(3), pages 378-382.
    17. Niizeki, Takeshi & Hamaaki, Junya, 2023. "Do the self-employed underreport their income? Evidence from Japanese panel data," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).
    18. Morescalchi Andrea & Paruolo Paolo, 2020. "Too Much Stick for the Carrot? Job Search Requirements and Search Behaviour of Unemployment Benefit Claimants," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.
    19. Solenne Tanguy, 2006. "Recherche d'emploi : entre assurance et incitation," Revue d'économie politique, Dalloz, vol. 116(1), pages 43-64.
    20. Hartman, Laura & Hesselius, Patrik & Johansson, Per, 2013. "Effects of eligibility screening in the sickness insurance: Evidence from a field experiment," Labour Economics, Elsevier, vol. 20(C), pages 48-56.

    More about this item

    Keywords

    Monitoring; Social insurance; Randomized experiments;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:ifauwp:2007_017. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ali Ghooloo (email available below). General contact details of provider: https://edirc.repec.org/data/ifagvse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.