x

Please fill out this short user survey of only 3 questions in order to help us improve the site. We appreciate your feedback!
The Laffer Cuve in the experimental context: a behavioural approach on income taxation
Last registered on June 29, 2019

Pre-Trial

Trial Information
General Information
Title
The Laffer Cuve in the experimental context: a behavioural approach on income taxation
RCT ID
AEARCTR-0004300
Initial registration date
June 11, 2019
Last updated
June 29, 2019 3:12 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
Universidad Autonoma de Madrid
Other Primary Investigator(s)
Additional Trial Information
Status
On going
Start date
2019-06-10
End date
2020-02-29
Secondary IDs
Abstract
This project explores the existence of a Laffer curve related with the personal income tax, from a behavioral economics approach. For this purpose, we designed an economic experiment testing the effects of different tax rates on the level of effort that subjects decide to exert. This study aims to contribute to the debate generated between traditional neoclassical economics and theories based on the behavior of economic agents. The approach from behavioral economics is of special interest, given the limitations and excessive simplicity that arise when estimating the Laffer curve through other sources. On the contrary, experimental methods allow to introduce factors and generate precise data about individual decisions. The results will help determine the existence or absence of a behavioral Laffer curve.
External Link(s)
Registration Citation
Citation
Rodriguez-Priego, Nuria. 2019. "The Laffer Cuve in the experimental context: a behavioural approach on income taxation." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.4300-1.0.
Former Citation
Rodriguez-Priego, Nuria. 2019. "The Laffer Cuve in the experimental context: a behavioural approach on income taxation." AEA RCT Registry. June 29. http://www.socialscienceregistry.org/trials/4300/history/48913.
Sponsors & Partners

There are documents in this trial unavailable to the public. Use the button below to request access to this information.

Request Information
Experimental Details
Interventions
Intervention(s)
Previous authors have provided evidence on the existence of the Laffer Curve (Wanninski, 1978, Fullerton, 1982, Lindsey, 1985). Its study has been carried out through economic models in order to quantify the "Laffer effect" of taxation (Stuart, 1981, Feige and McGee, 1985, Fullerton, 1982, Canto et al., 1983, Bender, 1984 Lindsey, 1985); but there are also several studies that study this phenomenon from a behavioral economics perspective (Swenson, 1988, Sutter and Weck-Hanneman, 2003). All these studies confirm the existence of the Laffer curve in one way or another, subsequently appearing the concept of behavioral Laffer curve, which shows that individuals can reach the prohibited range before the conventional Laffer curve (Lévy-Garboua et al. al., 2009). We test the effect of different tax rates on the quantity of effort that subjects exert during a real effort experiment.
Intervention Start Date
2019-06-11
Intervention End Date
2019-07-31
Primary Outcomes
Primary Outcomes (end points)
We have two key outcome variables:the first one is the number of tasks that subjects decide to perform; the second one is the tax rate that player 1 will decide to impose.

We hypothesize that subjects confronted with a higher tax rate will decide to perform a lower number of tasks. The experiment is incentivized with a fixed quantity (show-up fee) and a variable quantity (depending on the number of tasks they perform and the tax rate they are imposed).
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Our design builds on Sutter & Weck-Hanneman (2003) and Levy-Garboua et al. (2009) experiments. We will run the experiment on the Laboratorio de Economia Experimental of the University Jaume I (LEE). Participants decide the tax rate or the level of effort they want to perform after knowing the tax rate they will be imposed, depending on their rol in the experiment. Their payment will depend on the decisions they make during the experiment.
Experimental Design Details
Randomization Method
computer
Randomization Unit
experimental sessions
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
300 subjects in total
Sample size: planned number of observations
300 subjects in total
Sample size (or number of clusters) by treatment arms
60 subjects per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Universitat Jaume I Castellon
IRB Approval Date
2019-06-10
IRB Approval Number
N/A
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, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS