Procrastination and Property Tax Compliance in Philadelphia

Last registered on February 01, 2017
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Pre-Trial

Trial Information

General Information

Title
Procrastination and Property Tax Compliance in Philadelphia
RCT ID
AEARCTR-0001988
Initial registration date
February 01, 2017

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
February 01, 2017, 5:17 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region

Primary Investigator

Name
Holger Sieg
Affiliation
University of Pennsylvania
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Michael Chirico
PI Affiliation
University of Pennsylvania
PI Name
John MacDonald
PI Affiliation
University of Pennsylvania
PI Name
Charles Loeffler
PI Affiliation
University of Pennsylvania
PI Name
Robert Inman
PI Affiliation
University of Pennsylvania

Additional Trial Information

Status
Completed
Start date
2015-03-01
End date
2016-07-15
Keywords
Governance
Additional Keywords
Tax Compliance, Property Taxation, Field Experiment, Deterrence, Public Service Appeal, Appeal to Civic Duty.
JEL code(s)
H
Secondary IDs
Abstract
Municipal governments commonly confront problems with property tax collection. We model tardy tax payers as procrastinators that have a present bias. Late payments arise due to lack of salience, lack of deterrence or lack of tax morale. To test the importance of the different theoretical explanations, we develop and implements a randomized controlled experiment conducted with the City of Philadelphia. The structure of the experiment allows us to identify the relative importance of the three key sets of parameters of our model.
External Link(s)

Registration Citation

Citation
Chirico, Michael et al. 2017. "Procrastination and Property Tax Compliance in Philadelphia." AEA RCT Registry. February 01. https://doi.org/10.1257/rct.1988-1.0
Former Citation
Chirico, Michael et al. 2017. "Procrastination and Property Tax Compliance in Philadelphia." AEA RCT Registry. February 01. https://www.socialscienceregistry.org/trials/1988/history/13641
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Despite the fact that there are no obvious financial gains to not
paying property taxes, we observe that a significant fraction of tax
payers do not pay on time. To explain the behavior of these
procrastinators, researchers have started to explore the effectiveness
of softer, nudge approaches or notification strategies to reinforce
the different motivations of tax compliance. This paper uses a field
experiment involving over 19,000 delinquent Philadelphia taxpayers to
examine the effectiveness of seven alternative strategies for
improving city property tax collection.
Intervention Start Date
2015-06-08
Intervention End Date
2015-06-19

Primary Outcomes

Primary Outcomes (end points)
Measures of tax compliance behavior such as full or partial payment received and tax payments received.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment focuses on delinquent Philadelphia taxpayers to
examine the effectiveness of seven alternative strategies for
improving city property tax collection. Each involves a randomly
assigned tax ``nudge'' of a delinquent taxpayer. The first is a
simple reminder that the payment is late. The next two involve the
reminder plus a threat of a significant sanction if payment is not
received by the end of the calendar year: a lien on the home when sold
equal to taxes due plus accrued interest and penalties or the
lien coupled with an immediate sheriff's sale of the home to collect
the lien. The final four nudges include the reminder coupled with an
appeal to what the tax compliance literature has called a ``tax
morale'' motive for paying one's tax taxes. The
four morale motives included here are: first, a reminder that taxes
pay for neighborhood services such as street repairs, trash pick-up
and the local park; second, a reminder that taxes pay for important
city-wide services such as police protection and public schools;
third, a reminder that 9 out of 10 Philadelphians have paid their
taxes and you have not; and fourth, a reminder that paying one's taxes
is an important obligation of citizenship in a democracy. Tax
compliance after receiving one of the seven ``nudges'' is then
compared to compliance for those who have not received a ``nudge''
dues to random assignment to a holdout sample.
Experimental Design Details
Randomization Method
randomization done in office by a computer
Randomization Unit
individual taxpayers
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
not apply
Sample size: planned number of observations
20,000 taxpayers
Sample size (or number of clusters) by treatment arms
approximately 2,000- 2,500
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
University of Pennsylvania
IRB Approval Date
2014-11-03
IRB Approval Number
Details not available
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials