Collegio Carlo Alberto is the host to the research project "Tax Morale and Social Desirability Bias: Examining the Shadow Economy Experimentally" (TAXMORALBIAS), awarded by the European Commission for a Marie Sklodowska-Curie Individual Fellowship.
Motivation
The concept of tax morale, while central to tax compliance, presents a complex duality when juxtaposed with social desirability bias. While high tax morale is typically associated with greater compliance, it can inadvertently lead individuals to both report and act in ways that are perceived as socially desirable, even if they deviate from their genuine beliefs or behaviors. This phenomenon is not limited to survey responses alone; the influence of social desirability bias can extend to real-world behaviors, potentially skewing individuals' engagement in the shadow economy. Recognizing and understanding this dynamic interplay between perceived societal expectations and actual economic behaviors is pivotal, as it can significantly impact the accuracy of shadow economy estimations and the effectiveness of tax compliance strategies.
The Project
By employing cutting-edge experimental methodology, the research aims to shed light on tax evasion behaviors across three European countries, each with its unique tax morale and compliance profile: Denmark, with its high tax morale and compliance; Italy, characterized by high tax morale but contrasting low compliance; and Latvia, where both tax morale and compliance are relatively low. The list experiment, a recent innovation in social research, is pivotal to this project. Designed to reduce biases in responses to sensitive questions, its insights will be integrated into a field experiment in collaboration with the State Revenue Service of Latvia. This synergy ensures that the project's academic discoveries are transformed into pragmatic tools and strategies to counteract the shadow economy.
Execution
The project unfolds in a phased manner. It begins with the list experiment spanning across Denmark, Italy, and Latvia, offering a panoramic view of the disparities in tax morale and compliance. This is succeeded by the field experiment in partnership with Latvia's State Revenue Service. Here, the theoretical meets the practical, as research insights are molded into tangible strategies. Parallelly, the project is committed to a slew of outreach activities, fostering dialogue, knowledge dissemination, and collaboration. The project will craft informed policy recommendations, tailored to address the shadow economy's unique facets across Europe.
Team
Andris Saulitis - PI
Pierluigi Conzo - Scientific advisor
Claudia Villosio - Research Manager
Updates on project activities 16.05.2024.-15.08.2024
During this period, several key milestones were achieved, marking significant progress in both the research and dissemination aspects of the project. Most notably, the data collection phase was successfully completed for the list experiment, resulting in a total of 6,915 responses gathered across three countries: Italy, Denmark, and Latvia. This comprehensive dataset will be crucial for subsequent in-depth analysis and validation of the experimental hypotheses, allowing the research to advance to its next stages.
The experimental results based on the collected data were presented at the 29th Biennial Association for the Advancement of Baltic Studies Conference, which took place from June 13–16, 2024 in New Haven, CT (USA). This conference, co-hosted by Yale University and the University of New Haven, provided an excellent platform for disseminating the findings to an international academic audience. The presentation generated insightful feedback from peers and facilitated valuable discussions, further strengthening the research's academic impact.
Building on the insights derived from the list experiment, progress was made in designing a field experiment in collaboration with the State Revenue Service (SRS) of Latvia to explore novel interventions that can improve tax compliance. Initial discussions and planning were conducted with the SRS to align the experimental framework with the operational objectives of the SRS, ensuring that the design will be both practical and impactful. This collaboration highlights the project's increasing focus on generating actionable, policy-relevant outcomes that directly contribute to improving tax collection strategies.
In terms of publication achievements, the manuscript entitled "Personalized Messaging Enhances Hospital Debt Collection While Prosocial Appeals Fail: Evidence from a Field Experiment" (DOI: 10.1177/20552076241277035) was accepted for publication in Digital Health. The acceptance of this manuscript represents a significant accomplishment, providing meaningful contribution to the scholarly discourse in health economics and public policy and strenghtens the career prospects of the principal investigator of this project.
Having received the final clearance from supervising institutions, the survey data collection was successfully launched. The project aims to collect responses from 2,300 participants in Italy, Denmark, and Latvia, in collaboration with the pollster company Norstat Latvija. This milestone was achieved after the submission of the pre-registration protocol to the American Economic Association RCT Registry. Prior to the launch of data collection, a comprehensive Data Management Plan was meticulously prepared and approved by the supervising authorities of the project, ensuring proper handling and storage of the collected data.
To strengthen the career prospects of the Principal Investigator (PI), a draft manuscript titled "Personal Touch in Public Health: Enhancing Hospital Debt Recovery through Customized Messaging" was prepared. This manuscript was subsequently submitted to the Digital Health (SAGE Journals), aligning with the Career Development Plan devised for the PI during this period. This step is a significant part of the PI's professional growth and contributes to the overall objectives of the project.
These activities mark important progress in the project, setting the stage for the next phases of research and analysis. The upcoming period will focus on the continuation of data collection, detailed analysis, and further dissemination of findings, as well as developing a field experiment based on the findings from the survey results.
Updates on project activities 15.10.2023.-15.01.2024
The research design of the list experiment was presentated at the Center for LabOratory Simulation and Experimental Research (CLOSER) at the University of Torino, which garnered positive reception. Crucially, the proposed experimental design received a favorable evaluation from the Ethics Committee, paving the way for the experimental study's launch in 2024.
