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Tax Morale and Conditional Cooperation


Frey, Bruno S; Torgler, Benno (2006). Tax Morale and Conditional Cooperation. Working paper series / Institute for Empirical Research in Economics No. 286, University of Zurich.

Abstract

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation betweennperceived tax evasion and tax morale. The results remain robust after exploitingnendogeneity and conducting several robustness tests. We also observe a strong positivencorrelation between institutional quality and tax morale.

Abstract

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation betweennperceived tax evasion and tax morale. The results remain robust after exploitingnendogeneity and conducting several robustness tests. We also observe a strong positivencorrelation between institutional quality and tax morale.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:April 2006
Deposited On:29 Nov 2011 22:47
Last Modified:07 Dec 2017 10:13
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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