The politics of digits: Evidence of odd taxation

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningfagfællebedømt

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.
OriginalsprogEngelsk
TidsskriftPublic Choice
Vol/bind154
Udgave nummer1-2
Sider (fra-til)59-73
ISSN0048-5829
DOI
StatusUdgivet - 2013

Bibliografisk note

Udgivet online i 2011

    Forskningsområder

  • Det Samfundsvidenskabelige Fakultet - tax policy, incumbent behavior, odd pricing, local govnments, public choice, gaming, political behavior, political economy, Policy and Organisational Management

ID: 33539184