The Use of Agent-Based Modelling to Investigate Tax Compliance

Hashimzade, N.; Myles, G.D.; Page, F.; Rablen, M.D.

doi:10.1007/s10101-014-0151-8

The Use of Agent-Based Modelling to Investigate Tax Compliance

Hashimzade, N.; Myles, G.D.; Page, F.; Rablen, M.D.

Authors

N. Hashimzade

G.D. Myles

F. Page

M.D. Rablen

Abstract

Agent-based modelling can be used to investigate the behavioural and social aspects of tax compliance. We illustrate the approach with two models. The first model emphasises the role of occupational choice in tax compliance, and explores the effect of non-compliance on risk-taking and income distribution. The modelling of the compliance decision is discussed with an emphasis on decision-making under uncertainty and social interaction. We then add to the model a social network which governs the transmission of information on attitudes and beliefs, and investigate alternative audit strategies. A strategy of auditing a fixed number of taxpayers from each occupation dominates alternative strategies (including random and focussed strategies) in the sense of first-order stochastic dominance.

Citation

Hashimzade, N., Myles, G., Page, F., & Rablen, M. (2015). The Use of Agent-Based Modelling to Investigate Tax Compliance. Economics of Governance, 16(2), 143-164. https://doi.org/10.1007/s10101-014-0151-8

Journal Article Type	Article
Acceptance Date	Nov 2, 2014
Online Publication Date	Nov 23, 2014
Publication Date	May 1, 2015
Deposit Date	Dec 8, 2014
Publicly Available Date	Dec 8, 2014
Journal	Economics of Governance
Print ISSN	1435-6104
Electronic ISSN	1435-8131
Publisher	Springer
Peer Reviewed	Peer Reviewed
Volume	16
Issue	2
Pages	143-164
DOI	https://doi.org/10.1007/s10101-014-0151-8
Keywords	Agent-based modelling, Tax evasion, Attitudes, Beliefs, Social network, Occupational choice, H26, D85, C63.
Public URL	https://durham-repository.worktribe.com/output/1416345