Collegio Carlo Alberto is the host to the research project "Tax Morale and Social Desirability Bias: Examining the Shadow Economy Experimentally" (TAXMORALBIAS), awarded by the European Commission for a Marie Sklodowska-Curie Individual Fellowship.
The concept of tax morale, while central to tax compliance, presents a complex duality when juxtaposed with social desirability bias. While high tax morale is typically associated with greater compliance, it can inadvertently lead individuals to both report and act in ways that are perceived as socially desirable, even if they deviate from their genuine beliefs or behaviors. This phenomenon is not limited to survey responses alone; the influence of social desirability bias can extend to real-world behaviors, potentially skewing individuals' engagement in the shadow economy. Recognizing and understanding this dynamic interplay between perceived societal expectations and actual economic behaviors is pivotal, as it can significantly impact the accuracy of shadow economy estimations and the effectiveness of tax compliance strategies.
By employing cutting-edge experimental methodology, the research aims to shed light on tax evasion behaviors across three European countries, each with its unique tax morale and compliance profile: Denmark, with its high tax morale and compliance; Italy, characterized by high tax morale but contrasting low compliance; and Latvia, where both tax morale and compliance are relatively low. The list experiment, a recent innovation in social research, is pivotal to this project. Designed to reduce biases in responses to sensitive questions, its insights will be integrated into a field experiment in collaboration with the State Revenue Service of Latvia. This synergy ensures that the project's academic discoveries are transformed into pragmatic tools and strategies to counteract the shadow economy.
The project unfolds in a phased manner. It begins with the list experiment spanning across Denmark, Italy, and Latvia, offering a panoramic view of the disparities in tax morale and compliance. This is succeeded by the field experiment in partnership with Latvia's State Revenue Service. Here, the theoretical meets the practical, as research insights are molded into tangible strategies. Parallelly, the project is committed to a slew of outreach activities, fostering dialogue, knowledge dissemination, and collaboration. The project will craft informed policy recommendations, tailored to address the shadow economy's unique facets across Europe.
Updates on project activities 15.10.2023.-15.01.2024
The research design of the list experiment was presentated at the Center for LabOratory Simulation and Experimental Research (CLOSER) at the University of Torino, which garnered positive reception. Crucially, the proposed experimental design received a favorable evaluation from the Ethics Committee, paving the way for the experimental study's launch in 2024.