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Citizens Preferences for Direct vs Indirect Taxation: Vertical vs Horizontal Equity

Last registered on May 23, 2024
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Pre-Trial

Trial Information

General Information

Title
Citizens Preferences for Direct vs Indirect Taxation: Vertical vs Horizontal Equity
RCT ID
AEARCTR-0009771
Initial registration date
July 25, 2022

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
July 26, 2022, 1:59 PM EDT

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

Last updated
May 23, 2024, 11:00 AM EDT

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

Locations

Country
Colombia
Region
Country
Indonesia
Region
Country
India
Region
Country
Nigeria
Region
Country
Philippines
Region

Primary Investigator

Name
Mahvish Shaukat
Affiliation
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Pierre Bachas
PI Affiliation
PI Name
Anders Jensen
PI Affiliation
PI Name
Christopher Hoy
PI Affiliation

Additional Trial Information

Status
Completed
Start date
2022-07-25
End date
2022-09-30
Keywords
Behavior, Governance, Welfare
Additional Keywords
Taxation, Equity, Fairness, Direct Taxation
JEL code(s)
H23, O23
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
A large share of the workforce works in self-employed in developing countries, a hard to tax segment, compared to salaried employees. We study the perception of fairness of the tax system, focusing on the horizontal inequity between salaried and self-employed individuals, in five large low and middle-income countries. We conjecture that the prevalence of self-employment, strengthens horizontal equity concerns, which in turn lowers demand for tax interventions, and especially direct income taxation. To test this hypothesis, we conduct online surveys eliciting individual perception on horizontal equity, tax fairness, relation to vertical equity and how these preferences relate to the tax instruments used by their governments. To test whether increased awareness of horizontal inequity affects tax preferences, we conduct a within-survey information treatments aimed at increasing the salience of this issue.
External Link(s)

Registration Citation

Citation
Bachas, Pierre et al. 2024. "Citizens Preferences for Direct vs Indirect Taxation: Vertical vs Horizontal Equity." AEA RCT Registry. May 23. https://doi.org/10.1257/rct.9771-3.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We administer an online survey to respondents across five countries eliciting their perceptions on horizontal tax equity regarding the gap in income tax collection between self-employed and salaried workers. During the survey, we show information about the proportion of tax contributions from self-employed versus salaried workers to a random subset of respondents, to test whether receiving this information influences their views regarding the horizontal fairness of the tax system.

We compare perceptions of horizontal fairness to vertical fairness, and enquire how these preferences relate to preferences for different tax instruments (direct vs indirect) and if respondents support tax policies aimed at reducing horizontal inequity.
Intervention (Hidden)
Intervention Start Date
2022-07-25
Intervention End Date
2022-09-30

Primary Outcomes

Primary Outcomes (end points)
Tax preferences, views on the role of the tax system, perceptions regarding horizontal equity between self-employed and employees in taxation, preferences regarding vertical vs horizontal inequity, and support for different types of tax instruments (direct vs indirect). These outcomes correspond to questions in the survey instrument and their use is detailed in the pre-analysis-plan.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
An information treatment will be administered during the online survey. The study sample will be split two treatment arms (T1: 30% and T2: 30%) and a control group (40%). The first treatment group (T1) will receive information about the share of tax revenue paid by self-employed workers in comparison to salaried employees in the country survey the survey is administered in. The second treatment group (T2) will receive the same information as T1 and an additional pedagogical treatment containing information on the contributors of the income tax and consumption tax. The survey experiment aims to raise awareness of self-employed employee tax gaps (saliency of horizontal equity) via T1 and T2 and clarify the link between equity concepts of tax instruments (T2).
Experimental Design Details
Randomization Method
Done on the computer by an online survey firm.
Randomization Unit
Individual Respondent
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
13,500
Sample size: planned number of observations
13,500, corresponding to 2,700 respondents in each of 5 countries
Sample size (or number of clusters) by treatment arms
1,100 respondents in control, 700 in T1, 700 in T2 for each of the 5 countries.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Analysis Plan Documents

PAP Horizontal Equity Preferences

MD5: 4a6bd0e2844e103bd1ce24c3fd6dafdb

SHA1: 9091466db4b75d9797db7864251c9a965b2bfc71

Uploaded At: August 23, 2022

PAP Horizontal Equity Preferences In Person Survey

MD5: c5a85d8e66049e3a3800f0a3c3231638

SHA1: dd2c64af8b321924f765ad12bbb98470eb40b679

Uploaded At: May 23, 2024

Horizontal Equity Preferences In Person Survey

MD5: 88fe566016a124596015449f39708718

SHA1: 1a8d0099629ccca28ae0ad1188bb3d84b2e5d09c

Uploaded At: May 23, 2024

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