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Nudging taxpayers to pay taxes on time: Evidence from a field experiment
Last registered on January 18, 2018

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
Last updated
January 18, 2018 5:47 PM EST
Location(s)
Region
Primary Investigator
Affiliation
Finnish Tax Administration
Other Primary Investigator(s)
PI Affiliation
Finnish Tax Administration
PI Affiliation
University of Jyvaskyla, School of Business and Economics
Additional Trial Information
Status
In development
Start date
2017-09-01
End date
2018-12-31
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.
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
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?
No
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.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers