Nudging taxpayers to pay taxes on time: Evidence from a field experiment

Last registered on January 18, 2018

View Trial History

Pre-Trial

Trial Information

General Information

Title

Nudging taxpayers to pay taxes on time: Evidence from a field experiment

RCT ID

AEARCTR-0002642

Initial registration date

January 18, 2018

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

January 18, 2018, 5:47 PM EST

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

Locations

Country

Finland

Region

Primary Investigator

Name

Markus Hammar

Affiliation

Finnish Tax Administration

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Ari Hyytinen

PI Affiliation

University of Jyvaskyla, School of Business and Economics

Contact Investigator

PI Name

Mikko Lintamo

PI Affiliation

Finnish Tax Administration

Contact Investigator

Additional Trial Information

Status

In development

Start date

2017-09-01

End date

2018-12-31

Keywords

Governance, Welfare

Additional Keywords

Tax, Collection

JEL code(s)

C93, D91, H26

Secondary IDs

Abstract

This study evaluates how nudges affect tax compliance behavior. We alter standard remainder letters with messages affected by behavioral science to see how they affect the willingness of paying taxes on time. We use administrative data from more than 150 000 individuals in Finland to conduct our experiment.

External Link(s)

Registration Citation

Citation

Hammar, Markus, Ari Hyytinen and Mikko Lintamo. 2018. "Nudging taxpayers to pay taxes on time: Evidence from a field experiment." AEA RCT Registry. January 18. https://doi.org/10.1257/rct.2642-1.0

Former Citation

Hammar, Markus, Ari Hyytinen and Mikko Lintamo. 2018. "Nudging taxpayers to pay taxes on time: Evidence from a field experiment." AEA RCT Registry. January 18. https://www.socialscienceregistry.org/trials/2642/history/25045

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

We conduct two interventions by slightly altering standard payment reminder letters. We add short sentences, intended to motivate the taxpayers to pay their taxes on time, into the letters. If customer's total tax due is over 170 euros the taxpayer will receive two reminder letters, the first one in late January and the other in February. If the customer receives two reminder letters the added sentence is same in both letters.

Intervention Start Date

2018-01-24

Intervention End Date

2018-03-31

Primary Outcomes

Primary Outcomes (end points)

(1) number of days the tax debt is not paid in full after sending the remainder letter
(2) share of tax debt paid
(3) customers paying tax debt in full after sending the remainder letter (dummy variable)

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

(1) Amount of payment plans made to the reminded tax debt before due date and before enforcement
(2) Amount of tax debt paid (in euros)

Secondary Outcomes (explanation)

Experimental Design

All customers with tax debt will be randomly divided to 11 groups of same size (about 13 500 individuals in group each in first trial).

Treatment groups will receive additional short sentence included in standard payment reminder letter and control group only receives the standard payment reminder letter.

Our experimental design is similar to, but not identical with, that of Hallsworth et al. (2017, Journal of Public Economics).

Experimental Design Details

Randomization Method

Randomization done in R-software with sample -function.

Randomization Unit

Individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

N/A

Sample size: planned number of observations

About 150 000 - 180 000 individuals.

Sample size (or number of clusters) by treatment arms

About 13 000 - 16 000 individuals in each treatment and the control group.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

With sample size 13 000 and with 37,5% reminded customer paid their taxes in last year and with power level at 80% results minimum detectable effect size to be 1.6% difference in means.

Supporting Documents and Materials

IRB