TAXMORALBIAS · Tax Morale and Social Desirability Bias: Examining the Shadow Economy Experimentally

Tax Morale and Social Desirability Bias: Examining the Shadow Economy Experimentally

The TAXMORALBIAS project investigated the relationship between tax morale and social desirability bias to advance understanding of the shadow economy and tax compliance in Europe using experimental methods. Tax morale — the shared belief in the inherent good of contributing to society through tax payments — is widely recognized as a key factor explaining tax compliance. However, the project posed a novel research question: could tax morale itself generate social desirability bias, leading individuals to misrepresent their tax behaviour in surveys and resulting in biased estimates of shadow economy participation? This question is particularly relevant in Europe, where tax morale varies significantly across regions. Nordic countries display high tax morale coupled with reported high tax compliance, Southern Europe exhibits high tax morale alongside lower compliance, and Baltic countries show both lower tax morale and lower compliance levels. Understanding these dynamics is crucial for developing effective policies to combat the shadow economy and improve tax compliance. The project addressed this research question through a methodologically novel two-stage experimental design combining list experiments with vignette experiments conducted across three European countries representing North, East, and South Europe. In addition, the project included a large-scale field experiment conducted in collaboration with Latvia's State Revenue Service. This field experiment tested the integration of gamification elements in tax administration feedback to improve timely tax compliance among legal entities. The project's conclusions underscore the value of experimental methods for understanding tax compliance behaviour and designing effective policy interventions. The evidence generated contributes to advancing shadow economy studies both methodologically and conceptually, offering new inquiry approaches grounded in behavioural science. The findings support policies that leverage behavioural insights, including gamification and personalized messaging, to improve tax administration effectiveness and citizen engagement. The research demonstrates that tax morale's relationship with tax behaviour is more complex than traditionally understood, influenced not only by individual moral convictions but also by how these convictions shape information disclosure in surveys and responses to institutional communications. By bridging laboratory research with field experiments and combining quantitative with qualitative insights, the project provides evidence-based foundations for future policy development in tax compliance and shadow economy reduction across Europe.

Текст от CORDIS, на английски · Данни: CORDIS, © Европейски съюз