Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35518
Authors: 
Konrad, Kai A.
Qari, Salmai
Year of Publication: 
2009
Series/Report no.: 
IZA discussion papers 4121
Abstract: 
We study the effects of patriotism on tax compliance. In particular, we assume that individuals feel a (random draw of) warm glow from honestly paying their taxes. A higher expected warm glow reduces the government's optimal audit probability and yields higher tax compliance. Second, individuals with higher warm glow are less likely to evade taxes. This prediction is confirmed empirically by a multivariate analysis on the individual level while controlling for several other potentially confounding factors. The findings survive a variety of robustness checks, including an instrumental variables estimation to tackle the possible endogeneity of patriotism. On the aggregate level, we provide evidence for a negative correlation between average patriotic warm glow and the size of the shadow economy across several countries.
Subjects: 
Patriotism
tax evasion
warm glow
JEL: 
H26
K42
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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