Are consumption taxes really disliked more than equivalent costs? Inconclusive results in the USA and no effect in the UK
- Author(s)
- Jerome Olsen, Christoph Kogler, Mark J Brandt, Linda Dezsö, Erico Kirchler
- Abstract
In two experiments on hypothetical purchase decisions, Sussman and Olivola (2011) found that US citizens prefer avoiding tax-related costs over avoiding tax-unrelated monetary costs of the same size. The original Experiment 1 and 2 tests of this Tax Aversion indicated that people are willing to wait longer to receive a discount when it refers to taxes (e.g., “axe-the-tax discount”) than when it is just a regular discount (e.g., “customer rewards”). We conducted high-powered close replications of both original studies, Experiment 1 (N = 590) and Experiment 2 (N = 650), which reveal either no effect (Experiment 1: r = 0.02, 95% CI [−0.06, 0.10]) or a small effect (Experimental 2: r = 0.09, 95% CI [0.01, 0.16]) in the USA. We also replicated both experimental procedures in the UK to test whether the effect generalized to a value added tax system. Neither Experiment 1 (N = 595; r = 0.01, 95% CI [−0.07, 0.09]) nor Experiment 2 (N = 673; r = 0.03, 95% CI [−0.04, 0.11]) revealed an effect in the UK. Tax Aversion in hypothetical consumption decisions seems to be a smaller phenomenon than originally proposed and does not generalize to a value added tax system.
- Organisation(s)
- Department of Occupational, Economic and Social Psychology, Vienna Center for Experimental Economics
- External organisation(s)
- Tilburg University
- Journal
- Journal of Economic Psychology
- Volume
- 75
- No. of pages
- 10
- ISSN
- 0167-4870
- DOI
- https://doi.org/10.1016/j.joep.2019.02.001
- Publication date
- 02-2019
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 501021 Social psychology, 501001 General psychology
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Applied Psychology, Sociology and Political Science
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/c4e0d96d-bb1b-4e6e-b4a5-ddb1560b1282