You’ve got mail: A randomised field experiment on tax evasion
New accepted paper in Management Science by Kristina M. Bott, Alexander W. Cappelen, Erik Ø. Sørensen and Bertil Tungodden titled "You’ve got mail: A randomised field experiment on tax evasion".
We report from a large-scale randomized field experiment conducted on a unique sample of more than 15 000 taxpayers in Norway, who were likely to have misreported their foreign income. By randomly manipulating a letter from the tax authorities, we cleanly identify that moral suasion and the perceived detection probability play a crucial role in shaping taxpayer behavior. The moral letter mainly works on the intensive margin, while the detection letter has a strong effect on the extensive margin. We further show that only the detection letter has long-term effects on tax compliance.