Applications of behavioural economics to tax evasion

The paper reviews recent models that have applied the techniques of behavioural economics to the analysis of the tax compliance choice of an individual taxpayer. The construction of these models is motivated by the failure of the Yitzhaki version of the Allingham–Sandmo model to predict correctly the proportion of taxpayers who will evade and the effect of an increase in the tax rate upon the chosen level of evasion. Recent approaches have applied non-expected utility theory to the compliance decision and have addressed social interaction. The models we describe are able to match the observed extent of evasion and correctly predict the tax effect but do not have the parsimony or precision of the Yitzhaki model.

Sobre la toma de decisiones economicas bajo incertidumbre

In this article we review the evolution of economic theory on decision making under uncertainty. After a brief reference to Expected Utility Theory, we refer to behavioural paradoxes, forcing the theorists to adopt less restrictive approaches, allowing us to explain a broader spectrum of phenomena. The complexity entailed in the new theories requires a multidimensional description of human attitudes towards risk. Nevertheless, measurement of this attitudes has not followed the desired path, with most elicitation methods remaining uni-dimensional.

Eliciting consumer preferences for certified animal-friendly foods: can elements of the theory of planned behavior improve choice experiment analysis?

Models used in neoclassical economics assume human behaviour to be purely rational. On the other hand, models adopted in social and behavioural psychology are founded on the ‘black box’ of human cognition. In view of these observations, this paper aims at bridging this gap by introducing psychological constructs in the well established microeconomic framework of choice behaviour based on random utility theory. In particular, it combines constructs developed employing Ajzen’s theory of planned behaviour with Lancaster’s theory of consumer demand for product characteristics to explain stated preferences over certified animal-friendly foods. To reach this objective a web survey was administered in the largest five EU-25 countries: France, Germany, Italy, Spain and the UK. Findings identify some salient cross-cultural differences between northern and southern Europe and suggest that psychological constructs developed using the Ajzen model are useful in explaining heterogeneity of preferences. Implications for policy makers and marketers involved with certified animal-friendly foods are discussed.

The impact of harvesting on a formerly endangered tropical bird: insights from life-history theory

1. Life-history theory assumes that trade-offs exist between an individual's life-history components, such that an increased allocation of a resource to one fitness trait might be expected to result in a cost for a conflicting fitness trait. Recent evidence from experimental manipulations of wild individuals supports this assumption. 2. The management of many bird populations involves harvesting for both commercial and conservation purposes. One frequently harvested life-history stage is the egg, but the consequences of repeated egg harvesting for the individual and the long-term dynamics of the population remain poorly understood. 3. We used a well-documented restored population of the Mauritius kestrel Falco punctatus as a model system to explore the consequences of egg harvesting (and associated management practices) for an individual within the context of life-history theory. 4. Our analysis indicated that management practices enhanced both the size and number of clutches laid by managed females, and improved mid-life male and female adult survival relative to unmanaged adult kestrels. 5. Although management resulted in an increased effort in egg production, it reduced parental effort during incubation and the rearing of offspring, which could account for these observed changes. 6. Synthesis and applications. This study demonstrates how a commonly applied harvesting strategy, when examined within the context of life-history theory, can identify improvements in particular fitness traits that might alleviate some of the perceived negative impact of harvesting on the long-term dynamics of a managed population.

The expected performance of single nucleotide polymorphism loci in paternity testing

We discuss the utility of single nucleotide polymorphism loci for full trio and mother-unavailable paternity testing cases, in the presence of population substructure and relatedness of putative and actual fathers. We focus primarily on the expected number of loci required to gain specified probabilities of mismatches, and report the expected proportion of paternity indices greater than three threshold values for these loci. (c) 2004 Elsevier Ireland Ltd. All rights reserved.

Future directions for child anxiety theory and treatment

The aim of this introductory paper, and of this special issue of Cognition and Emotion, is to stimulate debate about theoretical issues that will inform child anxiety research in the coming years. Papers included in this special issue have arisen from an Economic and Social Research Council (ESRC, UK) funded seminar series, which we called Child Anxiety Theory and Treatment (CATTS). We begin with an overview of the CATTS project before discussing (1) the application of adult models of anxiety to children, and (2) the role of parents in child anxiety. We explore the utility of adult models of anxiety for child populations before discussing the problems that are associated with employing them uncritically in this context. The study of anxiety in children provides the opportunity to observe the trajectory of anxiety and to identify variables that causally influence its development. Parental influences are of particular interest and new and imaginative strategies are required to isolate the complex network of causal relationships therein. We conclude by suggesting that research into the causes and developmental course of anxiety in children should be developed further. We also propose that, although much is known about the role of parents in the development of anxiety, it would be useful for research in this area to move towards an examination of the specific processes involved. We hope that these views represent a constructive agenda for people in the field to consider when planning future research.

Strong-segregation limit of the self-consistent field theory for diblock copolymer melts

The self-consistent field theory (SCFT) introduced by Helfand for diblock copolymer melts is expected to converge to the strong-segregation theory (SST) of Semenov in the asymptotic limit, $\chi N \rightarrow \infty$. However, past extrapolations of the lamellar/cylinder and cylinder/sphere phase boundaries, within the standard unit-cell approximation, have cast some doubts on whether or not this is actually true. Here we push the comparison further by extending the SCFT calculations to $\chi N = 512,000$, by accounting for exclusion zones in the coronae of the cylindrical and spherical unit cells, and by examining finite-segregation corrections to SST. In doing so, we provide the first compelling evidence that SCFT does indeed reduce to SST.

An RCT study to evaluate a targeted, theory driven healthy eating leaflet

A theory based healthy eating leaflet was evaluated against an existing publicly available standard leaflet. The intervention leaflet was designed to encourage healthy eating in 18-30 year olds and was developed by modifying an existing British Nutrition Foundation leaflet. The intervention leaflet targeted attitudes and self-efficacy. Participants (n=104) were randomly assigned either to the intervention, Foundation or a local food leaflet control condition. Cognitions were measured pre-intervention, immediately after reading the corresponding leaflet, and once again at two weeks follow-up. Critically, intentions to eat healthily were significantly greater at follow-up in the Intervention group compared to the other two groups, with the former leaflet also being perceived as more persuasive. The Intervention group also showed evidence of healthier eating at two weeks compared to the other two groups. Collectively the results illustrate the utility of a targeted theory-based approach.

Decision theory and real estate development: a note on uncertainty

Real estate development appraisal is a quantification of future expectations. The appraisal model relies upon the valuer/developer having an understanding of the future in terms of the future marketability of the completed development and the future cost of development. In some cases the developer has some degree of control over the possible variation in the variables, as with the cost of construction through the choice of specification. However, other variables, such as the sale price of the final product, are totally dependent upon the vagaries of the market at the completion date. To try to address the risk of a different outcome to the one expected (modelled) the developer will often carry out a sensitivity analysis on the development. However, traditional sensitivity analysis has generally only looked at the best and worst scenarios and has focused on the anticipated or expected outcomes. This does not take into account uncertainty and the range of outcomes that can happen. A fuller analysis should include examination of the uncertainties in each of the components of the appraisal and account for the appropriate distributions of the variables. Similarly, as many of the variables in the model are not independent, the variables need to be correlated. This requires a standardised approach and we suggest that the use of a generic forecasting software package, in this case Crystal Ball, allows the analyst to work with an existing development appraisal model set up in Excel (or other spreadsheet) and to work with a predetermined set of probability distributions. Without a full knowledge of risk, developers are unable to determine the anticipated level of return that should be sought to compensate for the risk. This model allows the user a better understanding of the possible outcomes for the development. Ultimately the final decision will be made relative to current expectations and current business constraints, but by assessing the upside and downside risks more appropriately, the decision maker should be better placed to make a more informed and “better”.

A theory of rational spatial agglomerations

We model the behavior of rational forward-looking agents in a spatial economy. The economic geography structure is built on Fujita et al. (1999)'s racetrack economy. Workers choose optimally what to consume at each period, as well as which spatial itinerary to follow in the geographical space. The spatial extent of the resulting agglomerations increases with the taste for variety and the expenditure share on manufactured goods, and decreases with transport costs. Because forward-looking agents anticipate the future formation of agglomerations, they are more responsive to spatial utility differentials than myopic agents. As a consequence, the emerging agglomerations are larger under perfect foresight spatial adjustments than under myopic ones.

A longitudinal study of carbon disclosure strategy: evidence from utility, energy and mining industries in the UK

The paper investigates how energy-intensive industries respond to the recent government-led carbon emission schemes through the content analysis of 306 annual and standalone reports of 25 UK listed companies from 2004 to 2012. This period of reporting captures the trend and development of corporate disclosures on carbon emissions after the launch of EU Emissions Trading Schemes (ETS) and Climate Change Act (CCA) 2008. It is found that in corresponding to strategic legitimacy theory, there is an increase in both the quality and quantity of carbon disclosures as a response to these initiatives. However, the change is gradual, which reflects in the achievement of peak disclosure period two years after the launch. It indicates that the new legislations have a lasting impact on the discourses rather than an immediate legitimacy threat from the perspective of institutional legitimacy theory. The results also show that carbon disclosures are an institutionalised practice as companies in the same industries and/or with same carbon trading account status appear to imitate and adopt the industry’s ‘best practice’ disclosure strategy to maintain legitimacy. The trend analysis suggests that the overall disclosure practice is still in its infant stage, especially in the reporting of quantitative and monetary items. The paper contributes to the social and environmental accounting literature by adopting both strategic and institutional view of legitimacy, which explains why carbon disclosures evolve in a specific way to meet the expectation of various stakeholders.