Location of Repository

Income Tax Evasion Dynamics: Evidence from an Agent-based Econophysics Model

By Michael Pickhardt and Goetz Seibold

Abstract

We analyze income tax evasion dynamics in a standard model of statistical mechanics, the Ising model of ferromagnetism. However, in contrast to previous research, we use an inhomogeneous multi-dimensional Ising model where the local degrees of freedom (agents) are subject to a specific social temperature and coupled to external fields which govern their social behavior. This new modeling frame allows for analyzing large societies of four different and interacting agent types. As a second novelty, our model may reproduce results from agent-based models that incorporate standard Allingham and Sandmo tax evasion features as well as results from existing two-dimensional Ising based tax evasion models. We then use our model for analyzing income tax evasion dynamics under different enforcement scenarios and point to some policy implications.

OAI identifier: oai:RePEc:arx:papers:1112.0233
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://arxiv.org/pdf/1112.0233 (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.