American Economic Journal: Microeconomics
no. 1, February 2013
This paper studies a new strategic auditing game in which atomistic
auditors maximize the success rate of audits, and provides a method
to calibrate its parameters based on audit data. Calibrating the
model to Italian auditing data, we provide an estimate of tax evasion
based on (non-random) audit data alone. Counterfactual simulation
of the model quantifies the costs and benefits of alternative auditing
policies. We compare decentralized enforcement with a counterfactual
"commitment policy," and compute the loss from the former.
(JEL H25, H26, M42)
Di Porto, Edoardo, Nicola Persico, and Nicolas Sahuguet.
"Decentralized Deterrence, with an Application to Labor Tax Auditing."
American Economic Journal: Microeconomics,
Business Taxes and Subsidies including sales and value-added (VAT)