Tallinn University of Technology

You are welcome to the Department of Economics and Finance research seminar “Terrorism and tax morale”. The seminar will take place on 08th of March at 16:00 - 17:00 in room SOC-413 and in MS Teams platform  (link).

Presenter: Gaygysyz Ashyrov (Estonian Business School)

Paper title: Terrorism and tax morale
Gaygysyz Ashyrov joint work with Luca Andriani (Birkbeck University of London) and Elodie Douarin (University College London SSEES)


Does terrorism increase tax morale? Terror attacks have been shown to impact political attitudes, with a shift towards more conservative views, and to increase people’s sense of insecurity. As a result, one could expect terrorism acts to increase people’s willingness to pay taxes to support the efforts of the state to fend off this threat. Alternatively, successful attacks may decrease citizen’s satisfaction with the state and thus lower tax morale. We propose to investigate this relationship, using France as a case-study, and using Regression Discontinuity Design (RDD): i.e. relying on a terrorist attack which took place as a large household value survey was being collected, thus allowing to compare average views in the population on tax paying before and after the attack. Specifically, we focus on a terrorist attack which took place at the end of March 2018 in the South of France, and we use the 2017 European Value Survey which was collected from early March to mid-August 2018. Over a quarter of the interviews had taken place before the attack. We find a small positive but insignificant effect of this attack on tax morale in the full sample. We also find a significant increase in the variance of tax morale after the attack. We further explore possible sources of heterogeneous response using a variety of sub-samples and respondents’ characteristics. In a country with relatively high-tax morale to start with, we conclude that terrorism has a negligible impact on citizen’s average willingness to pay taxes but polarises views in the population.

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in online format, unless announced otherwise. The seminar will last one hour, presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. The DEF seminar series is organised in collaboration with the project ’’Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context’’ (IBEP), which has received funding from the European Union Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Kadri Männasoo, kadri.mannasoo@taltech.ee .