Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82615
Authors: 
Engström, Per
Nordblom, Katarina
Ohlsson, Henry
Persson, Annika
Year of Publication: 
2011
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2011:17
Abstract: 
The objective of this paper is to study if taxpayers behave in a loss averse manner when filing their tax returns. This is important for tax design but also for understanding human behavior in general. The predictions of prospect theory can be contrasted to those of expected utility theory. We use data for 3.6 million Swedish taxpayers for the income year 2006. Our research method is quasi-experimental using a regression kink and discontinuity approach. We also use an alternative instrumental-variables approach. There is strong evidence of loss aversion. We estimate the coefficient of loss aversion using actual behavior and the instrument-variables approach. Our estimate is very close to the estimates reported in the experimental literature.
Subjects: 
loss aversion
prospect theory
tax compliance
quasi-experiment
regression kink
regression discontinuity
JEL: 
C21
C26
D03
H24
H26
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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