Tax compliance and psychic costs: Behavioral experimental evidence using a physiological marker

Although paying taxes is a key element of a well-functioning society, there is still limited understanding as to why people actually pay their taxes. Models emphasizing that taxpayers make strategic, financially motivated compliance decisions seemingly assume an overly restrictive view of human nature. Law abidance may be more accurately explained by social norms, a concept that has gained growing importance as research attempts to understand the tax compliance puzzle. This study analyzes the influence of psychic stress generated by the possibility of breaking social norms in the tax compliance context. We measure psychic stress using heart rate variability (HRV), which captures the psychobiological or neural equivalents of psychic stress that may arise from the contemplation of real or imagined actions, producing immediate physiologic discomfort. The results of our laboratory experiments provide empirical evidence of a positive correlation between psychic stress and tax compliance, thus underscoring the importance of moral sentiments for tax compliance. We also identify three distinct types of individuals who differ in their levels of psychic stress, tax morale, and tax compliance.

Psychic Punishment Costs and Deterrence

In this paper we analyze criminal deterrence in the presence of specific psychic costs of punishments. We consider a dynamic model with three players, analyzing the choices of a representative lawmaker, potential criminal and judge. In our setting the lawmaker decides whether to introduce a fixed punishment enhancement above a chosen threshold of crime level, depending on its popularity among the voters. In reaction, the judge, who is influenced by her own preferences as well as the opinion of her peer group, might change the probability of punishment, through affecting the standard of reasonable doubt. Our results suggest that large discontinuous and mandatory increases in punishment can have unintended effects that are contrary to the stated goal of such punishment enhancements. In equilibrium, when either the judge or her peer group is "anti-punishment" enough, the level of criminal activity might increase in response to the punishment enhancement. This perverse effect is less likely to occur if there is a higher number of peer groups within the "elite", so that a greater extent of self-selection by judges can occur. Our results have relevance for a number of areas outside the traditional criminal justice system as well, such as special courts (such as ecclesiastical or military courts), or the strictness and enforcement of regulations.

Vers un approfondissement de l’évaluation des états mentaux : exploration de leurs propriétés et répercussions

Les états mentaux réfèrent à la qualité de la capacité d’un individu à élaborer mentalement et à s’ouvrir à son expérience subjective dans l’ici et maintenant. Les divers états mentaux varient quant à la disponibilité des ressources représenta-tionnelles et affectives pouvant être activées afin d’organiser l’expérience vécue, ainsi que dans leur utilisation de stratégies défensives et d’autorégulation. La présente thèse avait pour objectifs 1) d’approfondir l’évaluation des états mentaux par le développement et la validation d’un instrument pratique, le Mental States Task (MST), développé afin d’évaluer différentes qualités d’états mentaux et 2) d’investiguer les propriétés psychiques et les répercussions des différents états mentaux. Le premier article avait pour but de valider le MST. La première partie de l’article est consacrée à la validation du MST dans sa version francophone, et la deuxième partie porte sur la traduction et la validation du MST dans sa version anglophone. Les résultats fournissent des indices convaincants de validité et de fidélité, ainsi qu’une valeur prédictive adéquate. Le MST semble représenter de façon conforme autant les états mentaux de bas niveau que de haut niveau selon le continuum de réflexivité. De fait, les états mentaux de bas niveau et de haut niveau ont été respectivement associés à un large spectre de construits négatifs/immatures et positifs/matures. De plus, chaque état mental évalué par le MST semble posséder des propriétés particulières relativement aux processus mentaux et émotionnels utilisés pour traiter l’expérience. Le second article avait pour objectif d’approfondir l’étude de la valeur prédictive du MST par le biais de l’évaluation des coûts psychiques engendrés par les différentes qualités d’états mentaux—coûts présumés dépendant des ressources représentationnelles disponibles et du type de stratégies de régulation utilisées. Les résultats suggèrent que les états mentaux de bas niveau génèrent des coûts énergétiques plus élevés, ayant pour répercussion d’entraîner subséquemment un effet de déplétion du moi. Inversement, les états mentaux de haut niveau engendrent de moindres coûts, protégeant contre un état subséquent de déplétion du moi. Le MST s’est avéré être un outil efficace d’évaluation des répercussions énergétiques occasionnées par les divers états mentaux.

Exposure to pesticides, ill health and averting behaviour : costs and determining the relationship

Farmers' exposure to pesticides is high in developing countries. As a result many farmers suffer from ill-health, both short and long term. Deaths are not uncommon. This paper addresses this issue. Field survey data from Sri Lanka are used to estimate farmers' expenditure on defensive behavior (DE) and to determine factors that influence DE. The avertive behavior approach is used to estimate costs. Tobit regression analysis is used to determine factors that influence DE. Field survey data show that farmers' expenditures on DE are low. This is inversely related to high incidence of ill health among farmers using pesticides.

The impact of planning delays and other holding costs on housing affordability

Housing affordability is gaining increasing prominence in the Australian socioeconomic landscape, despite strong economic growth and prosperity. It is a major consideration for any new development. However, it is multi-dimensional, has many facets, is complex and interwoven. One factor widely held to impact housing affordability is holding costs. Although it is only one contributor, the nature and extent of its impact requires clarification. It is certainly more multifarious than simple calculation of the interest or opportunity cost of land holding. For example, preliminary analysis suggests that even small shifts in the regulatory assessment period can significantly affect housing affordability. Other costs associated with “holding” also impact housing affordability, however these costs cannot always be easily identified. Nevertheless it can be said that ultimately the real impact is felt by those whom can least afford it - new home buyers whom can be relatively easily pushed into the realms of un-affordability.

Final : report assessing risk and variation in maintenance and rehabilitation costs for road network

This report presents the results of research projects conducted by The Australian Cooperative Research Centre for Construction Innovation, Queensland University of Technology, RMIT University, Queensland Government Department of Main Roads and Queensland Department of Public Works. The research projects aimed at developing a methodology for assessing variation and risk in investment in road network, including the application of the method in assessing road network performance and maintenance and rehabilitation costs for short- and long-term future investment.

Report : review of the literature : maintenance and rehabilitation costs for roads (Risk-based Analysis)

Realistic estimates of short- and long-term (strategic) budgets for maintenance and rehabilitation of road assessment management should consider the stochastic characteristics of asset conditions of the road networks so that the overall variability of road asset data conditions is taken into account. The probability theory has been used for assessing life-cycle costs for bridge infrastructures by Kong and Frangopol (2003), Zayed et.al. (2002), Kong and Frangopol (2003), Liu and Frangopol (2004), Noortwijk and Frangopol (2004), Novick (1993). Salem 2003 cited the importance of the collection and analysis of existing data on total costs for all life-cycle phases of existing infrastructure, including bridges, road etc., and the use of realistic methods for calculating the probable useful life of these infrastructures (Salem et. al. 2003). Zayed et. al. (2002) reported conflicting results in life-cycle cost analysis using deterministic and stochastic methods. Frangopol et. al. 2001 suggested that additional research was required to develop better life-cycle models and tools to quantify risks, and benefits associated with infrastructures. It is evident from the review of the literature that there is very limited information on the methodology that uses the stochastic characteristics of asset condition data for assessing budgets/costs for road maintenance and rehabilitation (Abaza 2002, Salem et. al. 2003, Zhao, et. al. 2004). Due to this limited information in the research literature, this report will describe and summarise the methodologies presented by each publication and also suggest a methodology for the current research project funded under the Cooperative Research Centre for Construction Innovation CRC CI project no 2003-029-C.

Report : development of a methodology for assessing variation in maintenance and rehabilitation costs

In the previous research CRC CI 2001-010-C “Investment Decision Framework for Infrastructure Asset Management”, a method for assessing variation in cost estimates for road maintenance and rehabilitation was developed. The variability of pavement strength collected from a 92km national highway was used in the analysis to demonstrate the concept. Further analysis was conducted to identify critical input parameters that significantly affect the prediction of road deterioration. In addition to pavement strength, rut depth, annual traffic loading and initial roughness were found to be critical input parameters for road deterioration. This report presents a method developed to incorporate other critical parameters in the analysis, such as unit costs, which are suspected to contribute to a certain degree to cost estimate variation. Thus, the variability of unit costs will be incorporated in this analysis. Bruce Highway located in the tropical east coast of Queensland has been identified to be the network for the analysis. This report presents a step by step methodology for assessing variation in road maintenance and rehabilitation cost estimates.