American Economic Journal Economic Policy· 2026Q1
Identifying Tax Compliance from Variation in Tax Policy: Theory and Empirics
- 1citations
- Q1SCImago
- 2026year
Short summary
A new method can identify tax compliance and elasticities using price/quantity data before and after tax policy changes, finding 0-3.5% of Airbnb transactions were taxed pre-enforcement.
AI-generated from the title and abstract; the full text is not read.
Key points
- A new general approach can point-identify tax compliance and supply/demand elasticities.
- Identification requires price/quantity data from before and after tax policy changes, plus a demand or supply shifter.
- The method was applied to Airbnb data where tax burdens were shifted to renters for enforcement.
- Prior to enforcement, 0-3.5% of Airbnb transactions were taxed.
AI-generated from the title and abstract; the full text is not read.
Abstract
Governments increasingly use changes in tax rules to combat evasion. We develop a general approach to point-identify tax compliance along with supply and demand elasticities; identification requires data on prices and quantities before and after changes in tax enforcement and a demand or supply shifter. We illustrate our approach using data on Airbnb collection agreements, where full enforcement is achieved by shifting the tax burden away from hosts to renters via the platform. We find that taxes are paid on roughly zero to 3.5 percent of Airbnb transactions prior to enforcement.
The authors' abstract, as published at the source. American Economic Journal Economic Policy, 2026 · DOI ↗
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Field: Economics and Econometrics
Economics and EconometricsEconomics, Econometrics and Finance