The Resource Raising the stakes : experimental evidence on the endogeneity of taxpayer mistakes

Raising the stakes : experimental evidence on the endogeneity of taxpayer mistakes

Label
Raising the stakes : experimental evidence on the endogeneity of taxpayer mistakes
Title
Raising the stakes : experimental evidence on the endogeneity of taxpayer mistakes
Creator
Subject
Language
eng
Summary
Recent evidence suggests consumers fail to account for taxes that are excluded from a good's displayed price. What is less understood is whether and how such "salience effects" depend on the magnitude of the tax. The authors conduct a laboratory shopping experiment with real stakes to study the effect of tax size on salience. They find no evidence that salience effects decline as the tax rate increases; they document a statistically significant salience effect at a tax rate that is considerably larger than the tax rates at which such effects have been previously documented. In fact, their results are more consistent with the hypothesis that higher taxes make consumers less attentive (at least for the range of taxes they consider). This result can be explained by a confirmation bias theory of salience: consumers tend to disregard information (like a tax) that does not align with their intention to purchase an item, and this lack of alignment increases in the size of the tax
Citation source
In: National tax journal. - Washington. - Vol. 71 (2018), no. 2 ; p. 201-230
http://library.link/vocab/creatorName
  • Feldman, N
  • Goldin, J
  • Homonoff, T
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • sales tax
  • taxpayer
Label
Raising the stakes : experimental evidence on the endogeneity of taxpayer mistakes
Instantiates
Publication
Label
Raising the stakes : experimental evidence on the endogeneity of taxpayer mistakes
Publication

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.37366609999999 4.9336932
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