The Economic Psychology of Tax Behaviour

Description

Tax evasion is a complex phenomenon which is influenced not just by economic motives but by psychological factors as well. Economic-psychological research focuses on individual and social representations of taxation as well as decision-making. In this 2007 book, Erich Kirchler assembles research on tax compliance, with a focus on tax evasion, and integrates the findings into a model based on the interaction climate between tax authorities and taxpayers. The interaction climate is defined by citizens' trust in authorities and the power of authorities to control taxpayers effectively; depending on trust and power, either voluntary compliance, enforced compliance or no compliance are likely outcomes. Featuring chapters on the social representations of taxation, decision-making and self-employed income tax behaviour, this book will appeal to researchers in economic psychology, behavioural economics and public administration.

Erich Kirchler is a Professor in the Department of Economic Psychology, Educational Psychology and Evaluation at the University of Vienna. His research interests include economic psychology, household financial decision making and tax behaviour and he has written several books in these areas.

'This is an interesting, comprehensive and excellent examination of the behavioural aspects of tax compliance and evasion - based on insights from social and cognitive psychology, behavioural economics, and game theory. Kirchler's book considers the role of economic incentives in tax compliance, but he also argues that factors such as moral considerations, fairness concerns, and the citizens' trust in the state play a crucial role. His broad approach makes the book interesting for both tax authorities and social scientists alike.' Ernst Fehr, Director of the Institute for Empirical Research in Economics, University of Zurich 'The economic psychology of taxation is often seen by those outside the area as a rather dull business, suitable for anoraks and plodders. But taxation arouses passion, has an impact on people's behaviour and has serious repercussions for the wider economy. So it is very pleasing that Kirchler's book does full justice to the fascination of people's tax behaviour. His account is integrative, insightful and imaginative: it draws on research from a very wide range of social scientific scholarship and from these disparate ingredients creates an intellectual dish that is a real treat. This is a book with real substance; Kirchler is appropriately cautious in his conclusions, but actually there are very practical implications for tax authorities here and plenty of nuggets for social psychologists, economists and socio-legal scholars. Above all, this is a good read - and a good read that should be read.' Paul Webley, Professor of Economic Psychology, University of London