Seminars on the History and Philosophy of Microeconomics

MicroCafé - Seminars on the History and Philosophy of Microeconomics
Wednesday February 23, 2011
Luca Zarri (University of Verona)
Happiness and Tax Morale
Venue: Economics Dept, University of Milan, Via Conservatorio 7, Milan, 2nd floor, seminar room
Abstract:
This paper presents evidence that \tax morale" - taxpayers' intrinsic motivation to pay taxes - constitutes a new determinant of happiness, even after controlling for several demographic and socioeconomic factors. Using data on Italian households for 2004, we consider the distinction between unconditional vs conditional moral attitudes towards taxation and assess the strength of tax morale by relying on single items as well as composite multi-item indices. Our discovery that fiscal honesty generates a higher hedonic payoff than cheating is in line with Harbaugh et al. (2007)'s neuroeconomic findings. Further, it sheds light on the well-known "puzzle of compliance", that is the fact that many individuals pay taxes even when expected penalty and audit probability are extremely low: tax compliance is less puzzling once we show that not only it is materially costly, but also provides sizeable non-pecuniary benefi ts that make it rewarding in itself.
MicroCafé is a series of seminars devoted to historical and philosophical research in the foundations of microeconomics. Participation is open to all scholars interested in these topics. Papers are circulated in advance.
Seminars take place on Wednesday between 5.00-6.30 PM either at Bocconi University or at the University of Milan.
After the seminar, participants are invited to an informal “happy hour” discussion.
For information, contact francesco.guala@unimi.it or ivan.moscati@unibocconi.it