Loss evasion and tax aversion
2015 (English)In: American Economic Journal: Economic Policy, Vol. 7, 42 p.132-164 p.Article in journal (Refereed) Published
The objective of this paper is to study if taxpayers behave in a loss aversemanner when filing their tax returns. This is important for tax design but alsofor understanding human behavior in general. The predictions of prospecttheory can be contrasted to those of expected utility theory. We use datafor 3.6 million Swedish taxpayers for the income year 2006. Our researchmethod is quasi-experimental using a regression kink and discontinuity approach.We also use an alternative instrumental-variables approach. There isstrong evidence of loss aversion. We estimate the coefficient of loss aversionusing actual behavior and the instrument-variables approach. Our estimate isvery close to the estimates reported in the experimental literature.
Place, publisher, year, edition, pages
2015. Vol. 7, 42 p.132-164 p.
loss aversion, prospect theory, tax compliance, quasi-experiment
IdentifiersURN: urn:nbn:se:uu:diva-162508OAI: oai:DiVA.org:uu-162508DiVA: diva2:460601