Skip to main content
padlock icon - secure page this page is secure

Income Taxes and Risky Investment Decisions: An Experiment on Behavioral Tax Biases

Buy Article:

$25.00 + tax (Refund Policy)

We design a controlled experiment to examine investment behavior when a proportional income tax (with and without full loss offset) is introduced. Our design enables us to disentangle tax effects predicted by standard neoclassical theory and behavioral tax biases that cannot be predicted by this theory. We observe that investment behavior can be heavily distorted by behavioral tax biases and is consequently inconsistent with theoretical predictions. However, if we isolate these effects, we find support for the theory. We argue that the unpredicted behavior is a result of a tax-induced cognitive load variation.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Article Media
No Metrics

Keywords: BEHAVIORAL TAXATION; DOMAR–MUSGRAVE EFFECT; INVESTMENT DECISIONS; RISKTAKING BEHAVIOR; TAX PERCEPTION; TAXATION

Document Type: Research Article

Publication date: 01 December 2018

This article was made available online on 15 March 2018 as a Fast Track article with title: "Income Taxes and Risky Investment Decisions: An Experiment on Behavioral Tax Biases".

More about this publication?
  • Founded as Zeitschrift für die gesamte Staatswissenschaft in 1844.

    As one of the oldest journals in the field of political economy, the Journal of Institutional and Theoretical Economics (JITE) deals traditionally with the problems of economics, social policy, and their legal framework. JITE is listed in the Journal of Economic Literature, the Social Science Citation Index, the International Bibliography of the Social Sciences, and COREJ.

    Online First
    From 2013 on all accepted articles are published in an Online First version (in their final layout) to make them searchable and citable by their DOI immediately after peer review and acceptance. Once the article is published in an issue of the journal, the Online First version will be removed.

  • Editorial Board
  • Information for Authors
  • Submit a Paper
  • Subscribe to this Title
  • Information for Advertisers
  • Terms & Conditions
  • About Us
  • Contact
  • Ingenta Connect is not responsible for the content or availability of external websites
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more