Challenges for the Welfare State: Tax Evasion and Preferences for Redistribution

Last registered on May 21, 2024

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Pre-Trial

Trial Information

General Information

Title

Challenges for the Welfare State: Tax Evasion and Preferences for Redistribution

RCT ID

AEARCTR-0013081

Initial registration date

May 15, 2024

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

May 21, 2024, 10:57 AM EDT

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

Locations

Country

Spain

Region

Primary Investigator

Name

Dirk Foremny

Affiliation

Universitat de Barcelona

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Elena Molis

PI Affiliation

Universidad de Granada

Contact Investigator

PI Name

Ángel Solano-García

PI Affiliation

Universidad de Granada

Contact Investigator

PI Name

Natalia Jiménez-Jiménez

PI Affiliation

Universidad Pablo de Olavide

Contact Investigator

Additional Trial Information

Status

In development

Start date

2024-05-19

End date

2024-06-30

Keywords

Behavior, Governance, Other

Additional Keywords

Tax Evasion, Public Economics, Public Fiance, Survey Experiment

JEL code(s)

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

The main objective of this project is to study how perception of tax compliance affects preferences for the size of the welfare state and for income redistribution. Using a large-scale survey experiment, we test whether giving individuals information about tax evasion reduces their bias on this topic and changes their attitudes towards tax fraud, the support of the welfare state and the desired degree of progressivity of the tax system. In particular, we check if detailed information about the differences in the level tax evasion across individuals with different income alter their preferences.

External Link(s)

Registration Citation

Citation

Foremny, Dirk et al. 2024. "Challenges for the Welfare State: Tax Evasion and Preferences for Redistribution." AEA RCT Registry. May 21. https://doi.org/10.1257/rct.13081-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

This project is built on a large-scale survey experiment to be implemented in Spain. We implement a conventional pre-post information treatment, which exposes randomly selected survey participants to information about the magnitude of tax evasion in the personal income tax.

We measure the knowledge participants have before the experimental intervention, and repeat similar questions after, to measure to which extend the treated participants updated their beliefs (see Experimental Design).

We also randomize when participants are asked about trust in people and politicians before and after the other treatment interventions mentioned above to test weather priming effects on this dimension play a role.

We leverage participants' responses to different questions on preferences for redistribution to measure how important the dimension of lost revenues due to tax evasion is (see Outcomes below).

Intervention Start Date

2024-05-19

Intervention End Date

2024-06-30

Primary Outcomes

Primary Outcomes (end points)

The key outcome variables of the experiment are views on tax evasion, it's justification, and different dimensions which reflect individuals views on the support of the welfare state and the desired degree of progressivity of the tax system.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Using the same questions as above, as secondary outcomes we aim at estimating treatment effects conditional on the priming on trust.

Secondary Outcomes (explanation)

Experimental Design

We randomize the information provided to respondents in four groups. Control) does not receive any information; B) information about mean tax evasion in Spain; C) same as B + information about number of primary care doctors which could be hired with the evaded amount; and D) same as C + information about mean tax evasion in Spain of the 0.1\% richest citizens.

The priming on the trust dimension will be randomized across all treatments.

Experimental Design Details

Randomization Method

Randomization is technically implemented by the survey provider.

Randomization Unit

The unit of randomization is the individual respondent.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

The survey includes quotas to guarantee to be representative with population characteristics gender, age, region of residence dimension. The planned number of clusters is around 8.650 individuals. 1.000 observations will be used in a pilot. Our final sample will consist of 8.650 observations. These are distributed equally among the treatment arms (and control group).

Sample size: planned number of observations

The planned number of clusters is around 8.650 individuals. 1.000 observations will be used in a pilot. Our final sample will consist of 8.650 observations. These are distributed equally among the treatment arms (and control group).

Sample size (or number of clusters) by treatment arms

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

Supporting Documents and Materials

IRB