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11 eJTR 216 (2013)
Tax Experiments in the Real World

handle is hein.journals/ejotaxrs11 and id is 220 raw text is: eJournal of Tax Research (2013) vol. 11, no. 2, pp. 216-244 Tax experiments in the real world Lisa Marriott*, John Randal# and Kevin Holmes+ Abstract This article reports on the findings of a tax experiment conducted online with 2,600 individuals comprising a representative sample of the New Zealand population. We find that, in agreement with previous research, compliance increases with age. We find the population sample is significantly more compliant than previous experiments using student subjects. In contrast to prior experiments, we find no significant response to audit probability and no significant differences in behaviour among males and females. We find our experimental results produce compliance outcomes that are similar to those found in practice. Overall, the results suggest that caution should be exercised in the interpretation of experimental results from student subjects. Keywords: tax experiments, student subjects 1. INTRODUCTION The potential contribution to be gained from tax experiments is well established. The experimental environment facilitates control over variables and non-compliant behaviour is readily apparent. Actual levels of tax evasion, through non-declared income or over-declared expenses, cannot be accurately gauged through taxpayer filed data, while they are immediately evident in an experimental environment. Nonetheless, several criticisms have been attached to experimental research on tax evasion. Perhaps the primary criticism is that experimental research frequently utilises student subjects. As is typical of experimental research in tax, the objective of this research is to examine behavioural responses to hypothetical tax situations. Thus, the research uses an experimental design to elicit preferences in taxpaying behaviour in response to selected variables. However, this research departs from previous experiments in a number of ways. First, it uses 'real world' taxpayers in an online experiment. The authors have previously used a student sample using a similar experimental design in a lecture theatre environment (Marriott, Randal and Holmes, 2010). This research follows a similar method, but in an online setting. Second, a large sample of 2,600 subjects is used. Previously, experimental designs have been limited by access to participants. The online environment utilised in this research design has facilitated access to a large sample. Third, and again due to the research design utilised, a Corresponding Author. School of Accounting and Commercial Law at Victoria University of Wellington, New Zealand, telephone +64 4 463 5938 (Lisa.Marriottgvuw.ac.nz). # School of Economics and Finance at Victoria University of Wellington, New Zealand (John.Randal&Evwac.nz). + Contact details: drkevinholmesggmail.com. 1 For a comprehensive discussion on laboratory experiments, see Levitt and List (2007).

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