Experimental Estimates of Taxpayer Ethics

This paper extends the existing literature on taxpayer ethics in three ways. First, we construct a two-stage model of decision making, which allows us to disentangle risk preferences from ethical motivations for income tax compliance. Second, we develop a new experimental data set, which permits us to estimate the magnitudes of the relevant personality traits, risk aversion and morality, at the individual level. Third, we combine the experimental data with participant surveys so that ethical preferences are not only measured but also linked to demographic characteristics. We find that ethical preferences are correlated with risk aversion, age, gender, and marital status, among other characteristics.