Productivity, tax, and social preferences

Last registered on September 15, 2023
View Trial History

Pre-Trial

Trial Information

General Information

Title
Productivity, tax, and social preferences
RCT ID
AEARCTR-0011197
Initial registration date
April 06, 2023

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
April 13, 2023, 3:45 PM EDT

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

Last updated
September 15, 2023, 11:03 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Singapore
Region

Primary Investigator

Name
Gyula Seres
Affiliation
National University of Singapore
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2023-04-13
End date
2023-12-31
Keywords
Behavior, Labor, Welfare
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Prior real-effort labor market experiments find that the tax rate does not always have a negative effect on effort. This is not consistent with expected payoff-maximizing behavior as taxation reduces the marginal utility of effort. We address the puzzle by coontroling for social preferences. Using a stylized model, we show that stronger social preferences increase the marginal benefit of effort. We test this in a randomized laboratory experiment in which the subjects are alotted in groups. They complete paid typing tasks which income is taxed and the tax is redistributed within their group. We randomize the tax rate and estimate its effect between people of different social preferences.
External Link(s)

Registration Citation

Citation
Seres, Gyula. 2023. "Productivity, tax, and social preferences." AEA RCT Registry. September 15. https://doi.org/10.1257/rct.11197-1.2
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Before the main part, the usbjects complete a stage eliciting their social preferences. Then, the main part starts. The subjects participate in a computerized repeated real-effort experiment with a mundain typing task. There are one unincentivized trial round and five incentivized rounds. Their performance is measured by the number of finished tasks in a 4-minute-long round. For this, they receive a flat rate payment of 0.20 SGD per task. That is, their gross payment in a round is equal to 0.20 SGD x tasks. From Round 2, they are subjected to a tax rate of X percent. The subtracted amount is redistributed evenly within their randomly matched fixed groups of 3 participants. The session concludes with a demographic questionnaire. The treatments differ in the tax rate X: (10, 50 or 70%) and the provision of feedback between rounds (feedback vs no feedback).
Intervention Start Date
2023-04-13
Intervention End Date
2023-12-31

Primary Outcomes

Primary Outcomes (end points)
effort (score), social preferences
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The computerized experiment is done using zTree. The social preference elicitation stage will use the protocol of Andreoni and Miller (2002). In the typing task, the subjects recieve a random sequence of 15 letters and digits. The task is to type it in reverse using their keyboard.
Experimental Design Details
Not available
Randomization Method
The treatment randomization is done at the session level. All other randomizations are done by computer.
Randomization Unit
Treatment is randomized at the session level. Group matching and the task are done at the individual level.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
150 groups
Sample size: planned number of observations
450 subjects
Sample size (or number of clusters) by treatment arms
100 subjects in the feedback treatments (10%, 50%, and 70%); 50 subjects in the no feedback treatments (10%, 50% and 70%)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Income and transfers
IRB Approval Date
2022-09-30
IRB Approval Number
NUS-IRB-2022-99
Analysis Plan