Article in Harvard Business Review
Kristina Bott, Alexander W. Cappelen, Erik Ø. Sørensen and Bertil Tungodden have written an article in Harvard Business Review about their recent study which shows that moral appeals can help reduce tax evasion.
The classic approach to reducing tax evasion is to increase the probability of being detected and to increase penalties. However, in a new study, researchers from NHH show that moral motivation is important for tax compliance, and that a moral appeal in a letter from the tax authorities substantially reduces tax evasion.
The researchers find that the moral letters had about the same effect on the average as the detection letter. However, the effect of the moral letters comes from a smaller group of taxpayers than the effect of the detection letter.
The researchers also considered the long-term effects of the letters and found that only the detection letter had lasting impact on taxpayer behavior.