Analysing tax evasion dynamics via the Ising model
General Finance
2008-12-02 v1 Physics and Society
Abstract
We develop a model of tax evasion based on the Ising model. We augment the model using an appropriate enforcement mechanism that may allow policy makers to curb tax evasion. With a certain probability tax evaders are subject to an audit. If they get caught they behave honestly for a certain number of periods. Simulating the model for a range of parameter combinations, we show that tax evasion may be controlled effectively by using punishment as an enforcement mechanism.
Keywords
Cite
@article{arxiv.0801.2980,
title = {Analysing tax evasion dynamics via the Ising model},
author = {Georg Zaklan and Frank Westerhoff and Dietrich Stauffer},
journal= {arXiv preprint arXiv:0801.2980},
year = {2008}
}
Comments
15 pages including figures and the Fortran program