Using Divide-and-Conquer to Improve the Effectiveness of Tax Collection Under Limited Enforcement Capacity

Last registered on March 16, 2021

Pre-Trial

Trial Information

General Information

Title
Using Divide-and-Conquer to Improve the Effectiveness of Tax Collection Under Limited Enforcement Capacity
RCT ID
AEARCTR-0007305
Initial registration date
March 15, 2021

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
March 16, 2021, 6:36 AM EDT

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

Locations

Region

Primary Investigator

Affiliation
New York University

Other Primary Investigator(s)

PI Affiliation
Princeton University
PI Affiliation
INSEAD

Additional Trial Information

Status
In development
Start date
2020-12-15
End date
2021-09-30
Secondary IDs
Abstract
We partner with a municipal district in Lima, Peru to
implement a randomized controlled evaluation of divide-and-conquer
mechanisms for tax collection on a sample of roughly 15,000 taxpayers
delinquent in paying property taxes.
External Link(s)

Registration Citation

Citation
Chassang, Sylvain, Lucia Del Carpio and Samuel Kapon. 2021. "Using Divide-and-Conquer to Improve the Effectiveness of Tax Collection Under Limited Enforcement Capacity." AEA RCT Registry. March 16. https://doi.org/10.1257/rct.7305
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Tax payers will be assigned a numeric rank and will go through the tax collection process in order of their rank (i.e. rank 1 will always be prioritized over rank 2 when allocating processing capacity). Taxpayers will have the opportunity to settle and lock in the current tax-amount they owe. Taxpayers can either pay in full, or enter into a compromise, at a specified interest rate.

We will partition tax payers into 3 groups based on their numeric rank and inform them of their group at regular intervals. Each taxpayer is informed of a number of weeks, based on their group, after which collection procedures will be initiated immediately (which includes penalties, fees and other allowances for the cost of collection). Collection can be started at any time before this date without prior notice.
Intervention Start Date
2021-03-30
Intervention End Date
2021-07-30

Primary Outcomes

Primary Outcomes (end points)
Collection Amounts
Time and Resources Spent on the Collection Process
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We partition the sample into a control and treatment group, each with approximately half the sample. The main difference between the control group and the treatment is that the control group will not be notified of their numeric rank and priority group (and so will receive no information related to these groupings). Information in the treatment will be communicated through a card as well as with phone calls.

Ranks will be assigned by the research team using a score corresponding to: [Expected Payment] / [Probability Accepts to Pay].
Expected payment and probability of payment will be estimated using previous settlement data (including tax payer characteristics, and the stage in the process at which they settle).
Experimental Design Details
Randomization Method
Randomization done privately
Randomization Unit
Individual taxpayers
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
15,000 taxpayers
Sample size: planned number of observations
15,000 taxpayers
Sample size (or number of clusters) by treatment arms
~7500 for treatment and the same for control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
Princeton Institutional Review Board
IRB Approval Date
2021-01-13
IRB Approval Number
13529

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