Tax compliance and psychic costs: behavioral experimental evidence using a physiological marker

Dulleck, Uwe, Fooken, Jonas, Newton, Cameron, Ristl, Andrea, Schaffner, Markus and Torgler, Benno (2016) Tax compliance and psychic costs: behavioral experimental evidence using a physiological marker. Journal of Public Economics, 134 9-18. doi:10.1016/j.jpubeco.2015.12.007

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Author Dulleck, Uwe
Fooken, Jonas
Newton, Cameron
Ristl, Andrea
Schaffner, Markus
Torgler, Benno
Title Tax compliance and psychic costs: behavioral experimental evidence using a physiological marker
Journal name Journal of Public Economics   Check publisher's open access policy
ISSN 0047-2727
Publication date 2016-02-01
Sub-type Article (original research)
DOI 10.1016/j.jpubeco.2015.12.007
Open Access Status Not yet assessed
Volume 134
Start page 9
End page 18
Total pages 10
Place of publication Amsterdam, Netherlands
Publisher Elsevier BV
Language eng
Abstract Although paying taxes is a key element of a well-functioning society, there is still limited understanding as to why people actually pay their taxes. Models emphasizing that taxpayers make strategic, financially motivated compliance decisions seemingly assume an overly restrictive view of human nature. Law abidance may be more accurately explained by social norms, a concept that has gained growing importance as research attempts to understand the tax compliance puzzle. This study analyzes the influence of psychic stress generated by the possibility of breaking social norms in the tax compliance context. We measure psychic stress using heart rate variability (HRV), which captures the psychobiological or neural equivalents of psychic stress that may arise from the contemplation of real or imagined actions, producing immediate physiologic discomfort. The results of our laboratory experiments provide empirical evidence of a positive correlation between psychic stress and tax compliance, thus underscoring the importance of moral sentiments for tax compliance. We also identify three distinct types of individuals who differ in their levels of psychic stress, tax morale, and tax compliance.
Keyword Tax compliance
Psychic costs
Tax morale
Heart rate variability
Heterogeneous individuals
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
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UQ Business School Publications
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Citation counts: TR Web of Science Citation Count  Cited 8 times in Thomson Reuters Web of Science Article | Citations
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Created: Tue, 25 Oct 2016, 22:13:39 EST by Jonas Fooken on behalf of Centre for the Business & Economics of Health