Experimental evidence about deficit reduction strategies: bias in measuring tax and spending preferences

Dineen, Jennifer N.; Robbins, Mark D.; Simonsen, Brandi

doi:10.1108/jpbafm-29-01-2017-b004

Cited by 5 publications

(10 citation statements)

References 21 publications

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“…As a consequence, tax word aversion can result in individuals making decisions that are neither consistent nor welfare enhancing. Consistent with that notion, Dineen et al (2017) conducted a randomized experiment testing the difference in response to wording using spending cuts or tax increases to solve the Federal budget deficit. As the experiment was set up such that only spending cuts or tax increases could be used, the percentage tax cut is the same as (1-spending cuts).…”

Section: Conceptual Framework and Existing Literaturementioning

confidence: 99%

Experimental evidence about property tax word aversion

Brunner

Robbins

Simonsen

2021

Public Budgeting & Finance

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A small but growing literature suggests that simply using the word “tax” can create a visceral negative reaction among citizens. We tested tax word aversion using a representative sample of US residents who are randomly placed into experimental conditions and asked parallel questions about their support for services (approval of a tax increase or a revenue increase). The only difference between the two questions is the word “tax.” We find that the use of the word “tax” lowers support by about six and eight percentage points for fire and school services, respectively. This direct test of tax word aversion is based on a strong experimental design and a sufficient number of observations (over 4000) that allow for precise impact estimates.

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Section: Conceptual Framework and Existing Literaturementioning

confidence: 99%

Experimental evidence about property tax word aversion

Brunner

Robbins

Simonsen

2021

Public Budgeting & Finance

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“…Public budgeting and budgetary trade-offs -The literature on public budgeting and particularly on budgetary trade-offs is the most developed B-E area of research in PBFM (Arrington and Jordan, 1982;Brunner, Robbins, and Simonsen, 2018;Dineen, Robbins, and Simonsen, 2017;Robbins, Simonsen, and Feldman, 2004;Simonsen and Robbins, 2000). It informs studies of performance management and performance budgeting (Baekgaard, 2015;Baekgaard et al, 2016;Demaj, 2017;Nielsen and Baekgaard, 2013), which suggests that the experimental literature on budgetary tradeoffs is becoming more influential and recognized.…”

Section: Opportunities For B-e Researchmentioning

confidence: 99%

“…In another experiment, Dineen, Robbins, and Simonsen (2017) build off of their earlier work and research in psychology (Hardisty, Johnson, and Weber, 2010) that shows that the inclusion of the word "tax" influences the spending-tax tradeoff that citizens are willing to make. This research shows that issue labeling and framing can significantly influence the amount that they believe should come from taxes.…”

Section: Budget Tradeoff Experimentsmentioning

confidence: 99%

Behavioral-Experimental Public Budgeting and Financial Management: A Review of Experimental Studies in the Field

Mohr,

Kearney

2021

Public Finance and Management

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Behavioral research in public budgeting and financial management (PBFM) has a venerable lineage that extends all the way back to Herbert Simon's early analysis of budgetary processes. in spite of this early connection to public budgeting, behavioral research is now more commonly associated with behavioral economics, psychology and other disciplines. Importantly, the term behavioral is now most often associated with the use of experimental research designs. We argue that the common perception in PBFM is that there is not a significant amount of behavioral-experimental (B-E) research currently being conducted in PBFM. We find that contrary to this expectation that there are some important areas where PBFM researchers have used experiments extensively including evaluating budgetary tradeoffs, the impact of performance information on budgeting outcomes, contracting and purchasing, and accountability. We then review related literatures for studies in other fields that are related to areas of PBFM research. From this review of the literature on experiments in PBFM and related fields, we see significant differences in both theoretical development and experimental designs. in conclusion, we suggest that for Behavioral-Experimental PBFM (B-E PBFM) to flourish that the field should be open to new theories and experimental methods.

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“…Citizens are almost always less supportive when the word “tax” is used, even in the explicit context of tax and budget policy (Sussman and Olivola 2011). Dineen, Robbins, and Simonsen (2017) offered respondents two economically equivalent budget balancing trade‐offs and found significantly lower support for increased taxes when the solution was framed in terms of tax increases rather than spending cuts.…”

Section: Theory and Conceptual Frameworkmentioning

confidence: 99%

“…Those with responsibility for facilitating school improvements cannot control these voter attributes. Voters are sensitive to depictions of proposals as tax increases or service changes, and ballot wording that makes such characterizations might reasonably be expected to affect their choices (Dineen, Robbins, and Simonsen 2017; Ferrari and Randisi 2013; Sussman and Olivola 2011). Scholars have categorized these effects in various ways as tax aversion, information effects, fiscal illusion, tax salience, and political salience.…”

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confidence: 99%

Property Tax Information and Support for School Bond Referenda: Experimental Evidence

Brunner¹,

Robbins²,

Simonsen³

2020

Public Administration Review

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This article reports on an experiment testing whether additional information influences support for bond referenda. Respondents were randomly assigned to treatment conditions that varied the way the potential implications of property tax increases were presented to voters. The results show a persistent negative effect of tax information on the probability of support for school bond referenda across all treatments. Specifically, the results show that the probability of voting yes decreased by 6 to 9 percentage points, depending on the treatment. This result persists across multiple specifications and robustness tests. The effects are consistent across populations, with only those with high levels of education showing no statistically significant effect of the treatment on their support for school referenda. Evidence for Practice Some states require bond referenda to include statements that seek to make plain the connection between ballot passage and property taxes, while others do not. We find a persistent negative effect of property tax information on the probability of support for school bond referenda of 6 to 9 percentage points, depending on the wording. This line of research has become increasingly important to public policy making given that about half the states, including the largest state, California, have some type of property tax wording requirements for referenda. We argue that providing wording connecting property taxes to bond referenda passage is consistent with transparency efforts governments have pursued for decades. However, such wording might not improve the accuracy of information for citizens since, ultimately, the ensuing property tax levy depends on myriad factors, only one of which is debt service on bonds.

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Experimental evidence about deficit reduction strategies: bias in measuring tax and spending preferences

Cited by 5 publications

References 21 publications

Experimental evidence about property tax word aversion

Experimental evidence about property tax word aversion

Behavioral-Experimental Public Budgeting and Financial Management: A Review of Experimental Studies in the Field

Property Tax Information and Support for School Bond Referenda: Experimental Evidence

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