Dissertation

Essays in Empirical Public Economics

Tassi, Annalisa

2023

Overview

This dissertation is of a cumulative nature and it collects chapters covering distinct topics within the realm of empirical public economics. Each chapter is self-contained, but the topics covered can be divided in two main areas.The first area and the corresponding chapter relate to the literature on charitable giving, focusing on the supply of voluntary work. Specifically, chapter 1 asks whether an increase in community needs, as measured by the presence of refugees at the local level, affects the decision of a person to volunteer. One of the aims of chapter 1 is to empirically investigate the role of “pure altruism” (Andreoni 1989, 1990) as a determinant of the decision to volunteer.The second area includes two chapters that relate to the growing literature on the value-added tax (VAT). In particular, the two chapters investigate the effects of the introduction of reverse charge on VAT reporting. In a nutshell, reverse charge is a tax reform that affects VAT remittance by shifting the VAT remittance liability from the seller to the buyer in business-to-business transactions. While reverse charge is widely applied in the European Union and beyond, evidence on the effects of this reform on VAT systems is scant. Chapter 2 (co-authored with Thiess Büttner.) exploits the introduction of reverse charge in Germany to estimate the volume of VAT fraud that was ongoing prior to the reform. Chapter 3 investigates the effect of the introduction of reverse charge on VAT compliance at the business-to-consumer stage. The following paragraphs provide an abstract of each chapter, while more extensive summaries are provided in the Preface.Chapter 1studies the relationship between changes in community needs and the supply of voluntary work. I present basic theoretical considerations, which suggest that the relationship between voluntary work and an increase in community needs is ambiguous. Then, I test the relationship empirically by proxying community needs with the number of needy people, i.e., refugees, in a county, and by exploiting the quasi-experiment of refugees’ allocation within Germany. I find that doubling the number of refugees increases the probability of volunteering by about 2 percentage points. These estimates imply that 1.45 million people additionally volunteered during the refugee crisis, i.e., more than one person per refugee.Chapter 2focuses on the introduction of the so-called reverse-charge (RC) mechanism. In order to stop Value-Added Tax (VAT) fraud, EU member states use RC, which effectively removes VAT withholding and refunding in business-to-business transactions. Using the German VAT return data, we examine the effects of the introduction of RC and find that requests of input tax refunding decline sharply in the affected industries, supporting the presence of fraud prior to the introduction of RC. Based on our estimates, we quantify the revenue losses from VAT fraud prior to RC implementation in these industries to be around 5% of VAT revenues.Chapter 3explores the effects of the implementation of reverse charge on VAT remittances at the retail stage, using data on individual firms’ tax files from the universe of German VAT returns. The key feature of reverse charge is that VAT remittance liability is shifted from the seller to the buyer, in business-to-business transactions. The shift in remittance liability implies the elimination of multi-stage VAT collection and the concentration of VAT remittance at the retail stage. While an effective tool in the fight against cross-border VAT fraud, reverse charge may thus lead to greater VAT evasion at the retail stage. After identifying retailers affected by the reform, I examine if the introduction of reverse charge reduces their VAT compliance. The findings do not indicate that reverse charge leads to greater evasion at the retail stage.

• Publisher: ProQuest Dissertations & Theses
• Subject: Altruism / Cellular telephones / Economics / Fraud / International trade / Investigations / Refugees / Remittances / Retail sales / Retail stores / Retailing industry / Value chain / VAT / Volunteers
• ISBN: 9798311922128