This dissertation comprises three chapters. The first chapter investigates whether consumers can help governments improve firm compliance with the Value Added Tax. It exploits quasi-experimental variation from a government program from Sao Paulo, Brazil that created monetary rewards for consumers to ask for receipts. To assess how incentives to consumers can be effective despite potential collusion opportunities, I construct datasets for 1 million firms, 40 million consumers, and 2.7 billion receipts. I estimate that revenue reported in retail increased by at least 22% over four years. The estimated compliance effect is stronger for sectors with a high volume of transactions and small receipt values, consistent with a model in which there are fixed costs to negotiate collusive deals to avoid issuing receipts. Furthermore, the effect has an inverted-U shape with respect to firm size. This result is consistent with a model of higher baseline compliance among larger firms, and in which shifts in audit probability from consumer monitoring increase in firm size. I find no effects on exit rates or formal employment decisions.
| Identifer | oai:union.ndltd.org:harvard.edu/oai:dash.harvard.edu:1/12274276 |
| Date | January 2014 |
| Creators | Naritomi, Joana |
| Contributors | Chetty, Raj, Kremer, Michael Robert |
| Publisher | Harvard University |
| Source Sets | Harvard University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis or Dissertation |
| Rights | closed access |
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