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Aint that a Shame : False Tax Declarations and Fraudulent Benefit Claims

Author

Listed:
  • Barile, Lory

    (Department of Economics, University of Warwick)

  • Cullis, John

    (Department of Economics, University of Bath)

  • Philip Jones

    (Department of Economics, University of Bath)

Abstract

This paper begins by listing three uncomfortable implications of the standard expected utility model of individual decision-making concerning participation in fiscal crimes : that tax evasion and benefit fraud can be treated identically; fiscal crimes should be endemic; and that all individuals, depending on parameter values, should be either honest or dishonest. Levitt and List’s (2007) utility function relating to decisions with a moral dimension is adapted to offer insight into these implications involving an individuals optimal honesty and moral hinterland. Predictions are developed that include moral costs as a determinant of dishonest intentions and are tested with reference to some 2,942 questionnaire responses to a 2016 national (UK) survey. This paper offers insight into the way moral costs inform perceptions of the intrinsic value of doing the right thing thereby providing a richer analysis of fiscal crimes. The account has particular relevance for policy prescriptions that involve aspects of shame.

Suggested Citation

  • Barile, Lory & Cullis, John & Philip Jones, 2022. "Aint that a Shame : False Tax Declarations and Fraudulent Benefit Claims," The Warwick Economics Research Paper Series (TWERPS) 1435, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1435
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    More about this item

    Keywords

    benefit fraud ; tax evasion ; optimal honesty ; moral costs JEL Codes: D01 ; H2 ; K42;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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