Exposure to taxes and redistribution

Last registered on October 31, 2022
View Trial History

Pre-Trial

Trial Information

General Information

Title
Exposure to taxes and redistribution
RCT ID
AEARCTR-0010286
Initial registration date
October 21, 2022

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
October 31, 2022, 3:23 PM EDT

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

Locations

Country
Singapore
Region
Singapore

Primary Investigator

Name
Gyula Seres
Affiliation
National University of Singapore
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Noah Lim
PI Affiliation
National University of Singapore

Additional Trial Information

Status
In development
Start date
2022-10-31
End date
2022-12-15
Keywords
Governance, Lab, Welfare
Additional Keywords
microeconomics, labor, productivity, redistribution, tax
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This proposal aims at testing for bias in redistribution preferences. Using a laboratory labor market experiment, we can test whether preferences are influenced by experience with taxes and redistribution. The support for taxes is low and decreasing worldwide. Moreover, the top tax rates dropped substantially since the 80s, signaling a reference for a lower redistribution rate. This contradicts survey experiments that either show indifference toward income inequality or that rising inequality increases the claimed support for redistribution. Using an incentive-compatible voting mechanism on the level of taxes and redistribution, we use a laboratory experiment can identify the effect of changes in an individual's role (net payer or receiver) on their preferences about redistribution.
External Link(s)

Registration Citation

Citation
Lim, Noah and Gyula Seres. 2022. "Exposure to taxes and redistribution." AEA RCT Registry. October 31. https://doi.org/10.1257/rct.10286-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
In the laboratory experiment, randomly matched groups of three subjects play a repeated real-effort game with a flat-rate payment $0.30 for successfully completed tasks. A round lasts for 4 minutes. The real-effort task is to type a randomly generated block of 20 characters backward into a text box. The blocks of characters were randomly drawn with replacements from a pool of 500 pre-generated blocks. After submitting the text, participants receive feedback and a new block of characters.

In each round, a share t% of their payment may be taxed and redistributed evenly within the group. There are 5 periods. After every period, all payoffs, taxes, and subsidies are disclosed to the group members. In period 1, there is no tax. In period 2, the tax rate depends on the treatment. In the high redistribution (HR) treatment, t=50%. In the low redistribution (LR) treatment, t=10%. In the voting (VR) treatment, the subjects cast a vote on their preferred rate from the interval [0,60], and the median vote is implemented. From 3, there is always a vote before the work stage.
Intervention Start Date
2022-10-31
Intervention End Date
2022-12-15

Primary Outcomes

Primary Outcomes (end points)
Tax preferences; score in the real-effort task
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
In the laboratory experiment, randomly matched groups of three subjects play a repeated real-effort game with a flat-rate payment $0.30 for successfully completed tasks. A round lasts for 4 minutes. The real-effort task is to type a randomly generated block of 20 characters backward into a text box. The blocks of characters were randomly drawn with replacements from a pool of 500 pre-generated blocks. After submitting the text, participants receive feedback and a new block of characters. There are 5 rounds. After each round, the subjects pay a tax which is equally redistributed within the group.
Experimental Design Details
Randomization Method
Group membership is randomized by computer.
Randomization Unit
Treatment is randomized at the session level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
100 subjects in each of the 3 treatments.
Sample size: planned number of observations
300 participants
Sample size (or number of clusters) by treatment arms
100
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
NUS-IRB
IRB Approval Date
2022-05-03
IRB Approval Number
NUS-IRB-2022-99
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