Antonios Koumpias, assistant professor of economics at the University of Michigan-Dearborn, spoke on taxation and the effectiveness of behavioral strategies to enhance tax compliance during his seminar presentation to the department on February 14, 2019. His talk, “The Effects of Compliance Reminders on Personal Income Tax Payments in Greece; Evidence from a Regression Discontinuity Design,” recounted some of his work as an applied microeconomist in the public and health sectors across three different countries.
“Much of my work focuses on tax compliance — whether individuals and firms willingly file their taxes and pay in full every year — and what motivates them to do so,” said Koumpias. Working across Greece, Pakistan, and the United States, Koumpias’ work looks at the effectiveness of different behavioral methods used to encourage residents to pay annual taxes, including educational marketing and mass media campaigns.
“We’ve found that neutral nudges of information provision are ill-advised in an environment of weak tax enforcement, low credibility of deterrence, and the presence of generous tax debt repayment plans. Usually, behavioral strategies involving moral suasion and normative appeals only work in environments of high tax morale (voluntary tax compliance). However, deterrence has been found to be effective regardless of the underlying institutional environment.”
In addition to to this work, Koumpias collaborated with AFRE faculty member Trey Malone as well as Oklahoma State University’s Per Bylund to publish a paper in the Journal of Regulatory Economics titled, “Entrepreneurial Response to Interstate Regulatory Competition: Evidence from a Behavioral Public Choice Experiment.”
“There’s been an explosion of research on entrepreneurship in the last decade — but very few have used experiments,’ said Malone. “This paper shows how experimental methods can help researchers answer previously unanswerable questions regarding the role of government in new business creation.”
Koumpias brought his tax expertise to the project, as he and Malone looked at the role of barriers created by state governments that are likely to prevent entrepreneurs from launching a new business, including business startup taxes and occupational licensing requirements. The experiment found that most entrepreneurs are significantly less likely to launch their business in a place with high barriers like taxes and licensing needs.
“The methods used in this paper permitted the exploration of hypotheses considered untestable through the use of observable data. These are generalizable to any topic relying on secondary data for empirical analysis, and those only came about because of a collaboration between both of us,” said Koumpias. “I look forward to continue working across disciplines through this sort of collaboration with AFRE in the future.”
Koumpias received his Ph.D. in Economics from Georgia State University in 2017, and holds a Master's in Economics from Duke University, and a Bachelor's in Economics from the University of Macedonia in Thessaloniki, Greece.
Learn more about Koumpias and his public and health economics research.