Monday, September 10, 2018

Found that taxpayers’ attitudes toward evasion are not predictive of behavior & that tax compliance is not related to trust in government or one’s fellow citizens; Danes are more likely to evade tax than Italians; at the same time, Danes are less tolerant of tax evasion by others

Willing to Evade: An Experimental Study of Italy and Denmark. Alice Guerra and Brooke Harrington. Copenhagen  Business  School, Department  of  Business  and  Politics. ttps://

Abstract: Tax evasion varies widely across countries and follows a geographical pattern: Southern European countries such as Italy, Spain and Greece, are plagued by higher evasion rates than Northern European countries. This suggests a testable  research question: Can national identity explain  North-South  discrepancies  in  European tax compliance? We address this issue by conducting identical laboratory experiments in Denmark and Italy, two countries that lie not only at the opposite  ends of the spectrum on tax compliance but also at the extremes of cultural differences and citizen trust in the government. We adopt a double-hurdle model to separate the decision of whether to evade or not (extensive margin), from the decision of how much to evade (intensive margin). This study innovates both theoretically and methodologically. Theoretically, it contributes in two ways to the literature on tax compliance: 1) by showing that taxpayers’ attitudes toward evasion are not predictive of behavior; and 2) by showing that tax compliance is not related to trust in government or one’s fellow citizens. Methodologically, the paper innovates by  being the first to examine tax compliance in Denmark,  and  by testing the  effects  of  an extended vector of covariates on both the intensive and extensive margins of tax  behavior. Empirically, we find that--contrary to expectations--Danes are more likely  to evade tax than Italians; at the same time, Danes are less tolerant of tax evasion by others. We find that individual evasion choices are strongly affected by risk aversion and individual perception about others' compliance behavior. We conclude by discussing the implications of our findings for tax policies and future research.

Another, related interpretation is that discrepancies in tax behavior s are driven by differences in circumstances. Italians face the same circumstances as Dane s in the lab, but the circumstances Italians and Danes face outside the lab are very different. Danes can be highly motivated to evade taxes (even more than Italians) in situations where they have the possibility to do so (as in our experiment), but in mos t cases they are unable to cheat (e.g., because of the third-party reporting system and high tax enforcement they generally face). There is a crucial difference between being willing to evade taxes and being able to do so, and this depends upon the level o f tax enforcement and the reporting system in place. This explanation is coherent with the findings from the field experiment conducted by Kleven et al. (2011) in Denmark. The authors found that the tax evasion rate is close to zero for income subject to t hird-party reporting but substantial for self-reported income. Since most income in Denmark is subject to third-party reporting, the overall evasion rate is modest. In this respect, it would be interesting to ru n a similar field experiments with taxpayers in Italy to evaluate to extent to which compliance choices change under alternative reporting systems.

Overall, our experiment together with the recent cross-national laboratory experiments on tax behavior seem to reveal a common finding: that national identity, alone, cannot explain the North-South divergences in tax compliance. This result, which deserves further replication analyses, is encouraging because it suggests that tax policies and institutions play a crucial role in tax compliance. Indeed, fa ctors such as the traditional tax enforcement measures, redistribution policies, the threat of public disclosure of tax evasion, perception about others' compliance behavior, affect individual intrinsic motivation to fulfill fiscal obligations and should be used to mitigate evasion issues.

Rolf Degen summarizing: The negative beats the positive in terms of retweetability

Retweet: A popular information diffusion mechanism – A survey paper. Syeda Nadia Firdaus, Chen Ding, Alireza Sadeghian. Online Social Networks and Media, Volume 6, June 2018, Pages 26-40.

Abstract: Retweeting or reposting a message is considered as an easily available information diffusion mechanism provided by Twitter or any other social network sites. By finding out why a user retweets a tweet, or predicting whether a tweet will be retweeted by a user, we can not only understand user's behavior or interest better, but also understand how information is diffused on the online social network. In this survey paper, we have explored various research works related to retweet prediction and retweeting behavior analysis, investigated the underlying reasons for spreading information in forms of retweets, and discussed the challenges of retweet related research. The purpose of the paper is to provide an overview of researches in retweet prediction area, which can be used as an introductory guide for future researchers in this field.

The current institutional success/gov't quality of former colonies can be traced back to the extent of successful historical taxation

Colonial Revenue Extraction and Modern Day Government Quality in the British Empire. Rasmus Broms. World Development, Volume 90, February 2017, Pages 269-280.

•    Colonial revenue level is linked to modern day government quality in British colonies.
•    The association is stronger when neo-European colonies are excluded.
•    These findings call the extractive institutions hypothesis into question.

Summary: The relationship between the extent of government revenue a government collects, primarily in the form of taxation, and its overall quality has increasingly been identified as a key factor for successful state building, good institutions, and—by extension—general development. Initially deriving from historical research on Western Europe, this process is expected to unfold slowly over time. This study tests the claim that more extensive revenue collection has long-lasting and positive consequences for government quality in a developmental setting. Using fiscal records from British colonies, results from cross-colony/country regression analyses reveal that higher colonial income-adjusted revenue levels during the early twentieth century can be linked to higher government quality today. This relationship is substantial and robust to several specifications of both colonial revenue and modern day government quality, and remains significant under control for a range of rivaling explanations. The results support the notion that the current institutional success of former colonies can be traced back to the extent of historical revenue extraction.

People had self-insight into their momentary extraversion, conscientiousness, & likely neuroticism, suggesting that people can accurately detect fluctuations in some aspects of their personality; but not so much for agreeableness

Sun, Jessie, and Simine Vazire. 2018. “Do People Know What They’re Like in the Moment?.” PsyArXiv. September 9. doi:10.31234/

Abstract: Knowing yourself requires knowing not just what you are like in general (trait self-knowledge), but also how your personality fluctuates from moment to moment (state self-knowledge). We examined this latter form of self-knowledge. Participants (248 people; 2,938 observations) wore the Electronically Activated Recorder (EAR), an unobtrusive audio recorder, and completed experience sampling (ESM) self-reports of their personality states four times each day for one week. We estimated state self-knowledge by comparing self-reported personality states to consensual observer ratings of personality states coded from the EAR files, which formed the criterion for what participants were “actually” like in the moment. People had self-insight into their momentary extraversion, conscientiousness, and likely neuroticism, suggesting that people can accurately detect fluctuations in some aspects of their personality. However, the evidence for self-insight was weaker for agreeableness. This apparent self-ignorance may be partly responsible for interpersonal problems and for blind spots in trait self-knowledge.