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AN EXPERIMENTAL TEST OF THE PUBLIC-GOODS-CROWDING-OUT HYPOTHESIS WHEN TAXATION IS ENDOGENOUS
Category: Econometrics
TAX POLICY: EMPIRICAL Wednesday 28th August 2002, 09:30 - 11:00, Room: 5.2
Session Chair(s):
Philip Merrigan, University of Québec at Montréal, CANADA
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Abstract:
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Andreoni (1993; AER) has shown in an experimental study that crowding-out is incomplete when an involuntary lump-sum tax is levied exogenously on individuals to finance the provision of a public good. In this paper, we (i) replicate Andreoni's experimental conditions, and (ii) introduce a treatment where subjects determine endogenously by voting whether a tax is imposed or not. We find almost complete crowding-out with exogenous taxation. Voting behavior on the tax in the endogenous treatment has high predictive power for voluntary contributions. Subjects voting against the tax free ride more often than those voting for the tax.
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Find this file in the \Papers\177\ folder of this CD-ROM.
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