Beliefs about Behavioral Responses to Taxation

Last registered on February 06, 2018

Pre-Trial

Trial Information

General Information

Title
Beliefs about Behavioral Responses to Taxation
RCT ID
AEARCTR-0002186
Initial registration date
May 02, 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
May 02, 2017, 2:19 PM EDT

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

Last updated
February 06, 2018, 1:29 PM EST

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

Locations

Region

Primary Investigator

Affiliation
University of Bergen

Other Primary Investigator(s)

PI Affiliation
NHH Norwegian School of Economics
PI Affiliation
NHH Norwegian School of Economics

Additional Trial Information

Status
Completed
Start date
2017-05-02
End date
2017-05-31
Secondary IDs
Abstract
We collect novel data on people's beliefs about behavioral responses to taxation. First, we recruit workers from an online labor market to work on a task for one hour. We randomly manipulate the piece rate offered to the workers and whether they have to pay taxes on their earnings. We use these data to elicit incentivized beliefs from a representative sample of the U.S. population about how taxes affect people's effort choices. In particular, we provide evidence on whether Republicans and Democrats, who have very different views on redistribution of income and wealth, are divided in their beliefs about how taxes affect economic behavior.
External Link(s)

Registration Citation

Citation
Cappelen, Alexander, Ingar Haaland and Bertil Tungodden. 2018. "Beliefs about Behavioral Responses to Taxation." AEA RCT Registry. February 06. https://doi.org/10.1257/rct.2186
Former Citation
Cappelen, Alexander, Ingar Haaland and Bertil Tungodden. 2018. "Beliefs about Behavioral Responses to Taxation." AEA RCT Registry. February 06. https://www.socialscienceregistry.org/trials/2186/history/25551
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2017-05-02
Intervention End Date
2017-05-31

Primary Outcomes

Primary Outcomes (end points)
The key outcome variable is beliefs about the difference in production between workers in "High Pay" and workers in "Low Pay" (Treatment 1), "Government Tax" (Treatment 2), and "Redistributive Tax" (Treatment 3).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We recruit workers from an online labor market to work on a task for one hour. We randomly manipulate the piece rate offered to the workers and whether they have to pay taxes on their earnings. We use these data to elicit incentivized beliefs from a representative sample of the U.S. population about how taxes affect people's effort choices. Our key research question is whether beliefs differ between Republicans and Democrats.
Experimental Design Details
In the experiment, we have two types of participants: workers and spectators. In a real-effort task, the workers can earn a bonus from working on a task for one hour. From the spectators, we then elicit incentivized beliefs about how much the workers produced under different incentive schemes.

In a between-subject design, we have three treatments for the spectators. The spectators are first told that they will be asked how much they think others performed on a task and that they may earn a bonus if their answer is sufficiently close to how others actually performed on the task. We give the spectators the opportunity to spend up to two minutes on the task to gain familiarity with it. In each treatment, the spectators estimate average production for one group of workers. To help them calibrate their predictions, all spectators are informed about how much workers produced under the 20 cents piece with no tax.

In the first treatment, Treatment 1, the spectators estimate how much the workers produced under a 10 cents piece rate; in in the second treatment, Treatment 2, under a 20 cents piece rate with a 50% tax to the U.S. government; and in the third treatment, Treatment 3, under a 20 cents piece rate with a 50% redistributive tax.

We give the spectators the following information about the group of workers they estimate average production for:

Treatment 1: "An individual would earn a bonus of 10 cents for every
100 points he produced."

Treatment 2: "An individual would earn a bonus of 20 cents for every
100 points he produced, but had to pay a tax of 50% on the bonus.
The individual was informed that the tax would be passed on to the
U.S. federal government for general use."

Treatment 3: "An individual would earn a bonus of 20 cents for every
100 points he produced, but had to pay a tax of 50% on the bonus.
The individual was informed that the tax revenues from all 400
individuals offered Bonus B would be split equally among them."

This treatment design allows us to study beliefs about how both personal and social incentives shape work effort. In all treatments, the spectators are incentivized with a $10 bonus for accurate estimates (within +/- 5 percent of actual production).
Randomization Method
Randomizer in Qualtrics with the option "evenly present elements".
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
4500 spectators.
Sample size: planned number of observations
4500 spectators.
Sample size (or number of clusters) by treatment arms
1500 spectators in each treatment (i.e., 1500 spectators in Treatment 1; 1500 spectators in Treatment 2; and 1500 spectators in Treatment 3).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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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