Public choice & welfare
Dinsdag 13.15-15.00 hoorcollege
Donderdag 11.00-12.45 werkcollege
Paper 40%
Final exam 60%
Week 8
Behavioral economics.
Nog te lezen: hoofdstuk 16 (maar wel alle lecture slides bekeken)
, Week 7
Tax avoidance = changing behaviour legally to lower your tax burden
Tax evasion = illegally misrepresenting the situation to lower your tax burden
Rational tax evasion:
No tax evasion: U = U[(1-t)Y]
With tax evasion: E(U) = pU(Y-F) + (1-p)U(Y)
Tax evasion is rational for an individual if p(Y-F) + (1-p)Y > U[(1-t)Y]
The more risk averse, the higher the pay-off for tax evasion needs to be.
Critics of the standard model of tax evasion are the strong assumptions for simplification,
perfect information, perfect rationality, and partial equilibria (the model doesn’t incorporate
everything).
Nog te lezen: hoofdstuk 8 (maar wel alle lecture slides bekeken)
Dinsdag 13.15-15.00 hoorcollege
Donderdag 11.00-12.45 werkcollege
Paper 40%
Final exam 60%
Week 8
Behavioral economics.
Nog te lezen: hoofdstuk 16 (maar wel alle lecture slides bekeken)
, Week 7
Tax avoidance = changing behaviour legally to lower your tax burden
Tax evasion = illegally misrepresenting the situation to lower your tax burden
Rational tax evasion:
No tax evasion: U = U[(1-t)Y]
With tax evasion: E(U) = pU(Y-F) + (1-p)U(Y)
Tax evasion is rational for an individual if p(Y-F) + (1-p)Y > U[(1-t)Y]
The more risk averse, the higher the pay-off for tax evasion needs to be.
Critics of the standard model of tax evasion are the strong assumptions for simplification,
perfect information, perfect rationality, and partial equilibria (the model doesn’t incorporate
everything).
Nog te lezen: hoofdstuk 8 (maar wel alle lecture slides bekeken)
