The politics of digits: Evidence of odd taxation
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The politics of digits : Evidence of odd taxation. / Olsen, Asmus Leth.
I: Public Choice, Bind 154, Nr. 1-2, 2013, s. 59-73.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - The politics of digits
T2 - Evidence of odd taxation
AU - Olsen, Asmus Leth
N1 - Udgivet online i 2011
PY - 2013
Y1 - 2013
N2 - From the concept of odd pricing, i.e., setting rightmost price digits below a whole number, this paper advances the political counterpart of odd taxation using a panel of Danish municipal taxes. First, the distribution of tax decimals is non-uniform and resembles the distribution of price-endings data. Second, nine-ending and other higher-end decimals are found to be over-represented which echoes odd pricing research. It suggests that incumbents take voters’ biases into account and apply odd taxes to minimize the political costs of taxation while maximizing revenue. Attention should be given to how policy digits are arranged to exploit voters’ cognitive biases.
AB - From the concept of odd pricing, i.e., setting rightmost price digits below a whole number, this paper advances the political counterpart of odd taxation using a panel of Danish municipal taxes. First, the distribution of tax decimals is non-uniform and resembles the distribution of price-endings data. Second, nine-ending and other higher-end decimals are found to be over-represented which echoes odd pricing research. It suggests that incumbents take voters’ biases into account and apply odd taxes to minimize the political costs of taxation while maximizing revenue. Attention should be given to how policy digits are arranged to exploit voters’ cognitive biases.
KW - Faculty of Social Sciences
KW - tax policy
KW - incumbent behavior
KW - odd pricing
KW - local govnments
KW - public choice
KW - gaming
KW - political behavior
KW - political economy
KW - Policy and Organisational Management
U2 - 10.1007/s11127-011-9807-x
DO - 10.1007/s11127-011-9807-x
M3 - Journal article
VL - 154
SP - 59
EP - 73
JO - Public Choice
JF - Public Choice
SN - 0048-5829
IS - 1-2
ER -
ID: 33539184