Matthew Rablen

Matthew Rablen
The University of Sheffield | Sheffield · Department of Economics

PhD

About

57
Publications
17,279
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660
Citations
Introduction
Matthew Rablen currently works at the Department of Economics, University of Sheffield. Matthew does research in Microeconomics, Public Economics, and Behavioural Economics. Matthew's most recent publication is 'Tax avoidance and optimal income tax enforcement'.
Additional affiliations
October 2003 - October 2006
University of Warwick
Position
  • PhD

Publications

Publications (57)
Article
Full-text available
Recent years have witnessed the growth of mass-marketed tax avoidance schemes aimed at the middle (not top) of the income distribution, with significant implications for tax revenue. We examine the consequences for the structure of income tax, and for tax authority anti-avoidance efforts, of tax avoidance of this type. In a model that allows for bo...
Article
Full-text available
We analyse a model in which families may either be ‘traditional’ single-earner that care for the child at home or be ‘ modern’ double-earner households that use market child care. Family policies may favour one or the other group, like market care subsidies vs. cash-for-care. Policies are determined by probabilistic voting, where distributional imp...
Article
Full-text available
What is the compliance effect of experiencing a tax audit? Empirical studies typically report a positive effect, while laboratory experiments frequently report a negative effect. We show experimentally that whether a tax audit increases or decreases subsequent compliance hinges on the balance of learning opportunities, misperception of audit risk,...
Technical Report
Recent years have witnessed the growth of mass-marketed tax avoidance schemes aimed at the middle (not top) of the income distribution, with significant implications for tax revenue. We examine the consequences, for the structure of income tax, and for tax authority anti-avoidance efforts, of tax avoidance of this type. In a model that allows for b...
Article
Full-text available
We analyze the provision of infrastructure by a foreign investor when the domestic bureaucracy is corrupt, but puts some weight on domestic welfare. The investor may pay a bribe in return for a higher provisional contract price. After the investment has been sunk, the bureaucracy may hold up the investor, using the threat of expropriation to demand...
Article
Full-text available
Many regulators utilize self-reporting, i.e., wrongdoers reporting their own crimes to the authority, to enforce regulations in a variety of market contexts. This paper studies the effectiveness of self-reporting within the context of an oligopoly. We identify two important consequences of implementing self-reporting (relative to no-reporting) for...
Article
Full-text available
Tax authorities worldwide are implementing voluntary disclosure schemes to recover tax on offshore investments. The US and UK, in particular, have implemented such schemes in response to bulk acquisitions of information on offshore holdings, recent examples of which are the Paradise and Panama papers. Schemes offer affected investors the opportunit...
Article
Full-text available
We relate tax evasion behavior to a substantial literature on social comparison in judgements. Taxpayers engage in tax evasion as a means to boost their expected consumption relative to others in their social network. The unique Nash equilibrium of the model relates optimal evasion to a (Bonacich) measure of network centrality: more central taxpaye...
Preprint
Full-text available
We examine the optimal auditing problem of a tax authority when taxpayers can choose both to evade and avoid. For a convex penalty function, the incentive-compatibility constraints may bind for the richest taxpayer and at a positive level of both evasion and avoidance. The audit function is non-increasing in reported income, and is higher for progr...
Article
Full-text available
We characterize optimal individual tax evasion and avoidance when taxpayers “narrow bracket” the joint avoidance/evasion decision by exhausting all gainful methods for legal avoidance before choosing whether or not also to evade illegally. We find that (1) evasion is an increasing function of the audit probability when the latter is low enough, yet...
Chapter
Full-text available
The taxation of high-income earners is of importance to every country and is the subject of a considerable amount of recent academic research. Such high-income earners contribute substantial amounts of tax and generate significant positive spillovers, but are also highly mobile: a 1% increase in the top marginal income tax rate increases out-migrat...
Chapter
Full-text available
We examine the optimal auditing problem of a tax authority when taxpayers can choose both to evade and avoid. For a convex penalty function the incentive-compatibility constraints may bind for the richest taxpayer and at a positive level of both evasion and avoidance. The audit function is non-increasing in reported income, and is higher for progre...
Article
Full-text available
The United Nations Security Council (UNSC) is critical to global peace and security, yet more than twenty years of negotiations over its reform have proved fruitless. We use recent advances in the theory of a-priori voting power to present a formal quantitative appraisal of the implications for democratic equity and efficiency of the “structural re...
Article
Full-text available
The standard expected utility (EUT) model of tax evasion predicts that evasion is decreasing in the marginal tax rate (the Yitzhaki puzzle). Recent literature shows cases in which incorporating prospect theory (PT) does and does not overturn the Puzzle. In a general environment that nests both PT and EUT preferences, we provide a detailed study of...
Article
Full-text available
We analyze democratic equity in council voting games (CVGs). In a CVG, a voting body containing all members delegates decision-making to a (time-varying) subset of its members, as describes, e.g., the relationship between the United Nations General Assembly and the United Nations Security Council (UNSC). We develop a theoretical framework for analy...
Article
Full-text available
We characterize optimal individual tax evasion and avoidance when taxpayers " narrow bracket " the joint avoidance/evasion decision by exhausting all gainful methods for legal avoidance before choosing whether or not also to evade illegally. We find that (i) evasion is an increasing function of the audit probability when the latter is low enough, y...
Article
Full-text available
The literature on audit strategies has focused on random audits or on audits conditioned only on income declaration. In contrast, tax authorities employ the tools of predictive analytics to identify taxpayers for audit, with a range of variables used for conditioning. The paper explores the compliance and revenue consequences of the use of predicti...
Working Paper
Full-text available
We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies, and we give a diagrammatic formulation of the market equilibrium. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment, and wage employment. We then introduce labour market segmen...
Article
Full-text available
Agent-based modelling can be used to investigate the behavioural and social aspects of tax compliance. We illustrate the approach with two models. The first model emphasises the role of occupational choice in tax compliance, and explores the effect of non-compliance on risk-taking and income distribution. The modelling of the compliance decision is...
Article
Full-text available
We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies, and we give a diagrammatic formulation of the market equilibrium. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment, and wage employment. We then introduce labour market segmen...
Article
Full-text available
The paper analyses the emergence of group-specific attitudes and beliefs about tax compliance when individuals interact in a social network. It develops a model in which taxpayers possess a range of individual characteristics – including attitude to risk, potential for success in self-employment, and the weight attached to the social custom for hon...
Article
Full-text available
The Beckerian approach to tax compliance examines how a tax authority can maximize social welfare by trading-off audit probability against the fine rate on undeclared tax. This paper offers an alternative examination of the privately optimal behavior of a tax authority tasked by government to maximize expected revenue. The tax authority is able to...
Article
Full-text available
During the recent credit crisis credit rating agencies (CRAs) became increasingly lax in their rating of structured products, yet increasingly stringent in their rating of corporate bonds. We examine a model in which a CRA operates in both the market for structured products and for corporate debt, and shares a common reputation across the two marke...
Article
Full-text available
We model an urban labour market in a developing economy, incorporating workers’ risk attitudes. Trade-offs between risk aversion and ability determine worker allocation across formal and informal wage employment, and voluntary and involuntary self employment. Greater risk of informal wage non-payment can raise or lower informal wage employment, dep...
Article
Full-text available
The United Nations Security Council (UNSC) is the foremost international body responsible for the maintenance of international peace and security. Members vote on issues of global importance and consequently receive perks – election to the UNSC predicts, for instance, World Bank and IMF loans. But who gets elected to the UNSC? Addressing this quest...
Article
Full-text available
There is growing interest among policymakers in the promotion of wellbeing as an objective of public policy. In particular, local authorities have been given powers to undertake action to promote wellbeing in their area. Recent advances in the academic literature on wellbeing are giving rise to an increasingly detailed picture of the factors that d...
Article
Full-text available
Growing economic and psychological evidence documents effects of target setting on levels of effort and risk-taking, even in the absence of a monetary reward for attaining the target. I explore a principal-agent environment in which the principal sets the agent a performance target, and the agent's intrinsic motivation to work is influenced by thei...
Article
Full-text available
The standard portfolio model of tax evasion with a public good produces the perverse conclusion that when taxpayers perceive the public good to be under-/overprovided, an increase in the tax rate increases/decreases evasion. The author treats taxpayers as thinking in terms of gains and losses relative to an endogenous reference level, which reflect...
Article
Full-text available
Abstract The Saving Gateway is a government saving initiative aiming to ‘kick-start a saving habit among people on lower incomes’. Funds saved in a Saving Gateway account up to a monthly limit are matched by the government after two years at a rate of £0.50 per £1 saved. In this paper, a Saving Gateway account is embedded alongside an ordinary inte...
Article
Full-text available
It has been known for centuries that the rich and famous have longer lives than the poor and ordinary. Causality, however, remains trenchantly debated. The ideal experiment would be one in which extra status could somehow be dropped upon a sub-sample of individuals while those in a control group of comparable individuals received none. This paper a...
Article
Full-text available
Relative utility has become an important concept in several disjoint areas of economics. I present a cardinal model of income utility based on the supposition that agents care about their rank in the income distribution and that utility is subject to adaptation over time. Utility levels correspond to the Leyden Individual Welfare Function while uti...
Conference Paper
Full-text available
The standard portfolio model of tax evasion with a public good produces the perverse conclusion that when taxpayers perceive the public good to be under-(over-) provided, an increase in the tax rate increases (decreases) evasion. We treat taxpayers as thinking in terms of gains and losses relative to a reference outcome level, and model the relatio...

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