Abstract
This paper studies a new strategic auditing game in which atomistic auditors maximize the success rate of audits, and provides a method to calibrate its parameters based on audit data. Calibrating the model to Italian auditing data, we provide an estimate of tax evasion based on (non-random) audit data alone. Counterfactual simulation of the model quantifies the costs and benefits of alternative auditing policies. We compare decentralized enforcement with a counterfactual "commitment policy," and compute the loss from the former.
Original language | English (US) |
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Pages (from-to) | 35-62 |
Number of pages | 28 |
Journal | American Economic Journal: Microeconomics |
Volume | 5 |
Issue number | 1 |
DOIs | |
State | Published - Feb 2013 |
ASJC Scopus subject areas
- General Economics, Econometrics and Finance