Estimating Tax Noncompliance among the Self-Employed – Evidence from Pleasure Boat Registers

Edvard Johansson, Per Engström, Johannes Hagen

Tutkimustuotos: ValmisteluasiakirjaTyöpaperiTieteellinen


In this paper, we improve upon the Pissarides-Weber (PW) method for
estimating tax evasion among the self-employed by utilizing unique
register-based consumption measures from the Swedish and Finnish
mandatory registers for pleasure boats. Our main contributions are
twofold: i) The PW method crucially relies on the assumption that the
intrinsic consumption preferences are the same for self-employed and
wage earner households. Thanks to our rich data, we are able to test
this assumption directly by contrasting the Engel curves between wage
earner households and households that will become self-employed in
the future. We find that the group that will become self-employed is
only marginally more prone to own a boat before they actually become
self-employed. This lends support to the assumption of similar intrinsic
preferences between the two groups. ii) The large sample size that
comes with register-based consumption measures allows us to challenge
the standard functional form assumptions in previous PW applications.
The estimated sizes of income underreporting in absolute
monetary amounts are almost constant over reported income levels,
whereas previous studies have assumed that the underreporting is proportional
to income.
KustantajaAboa centre for economics
TilaJulkaistu - 23 maalisk. 2021
OKM-julkaisutyyppiD4 Julkaistut kehitykset tai tutkimusraportit tai tutkimukset


NimiDiscussion paper
KustantajaAboa Centre for Economics
ISSN (painettu)1796-3133


Sukella tutkimusaiheisiin 'Estimating Tax Noncompliance among the Self-Employed – Evidence from Pleasure Boat Registers'. Ne muodostavat yhdessä ainutlaatuisen sormenjäljen.