How social norms affect tax compliance
The Canada Revenue Agency sought to increase compliance with tax rules. A percentage of Canadians were contributing to their Tax-Free Savings Accounts beyond the legal limit. The Agency designed behavioral nudges to reduce the number of excessive contributions made. The four experimental groups received four different letters: one focusing on social norms, simplification, compliance, and a control. The results demonstrated that the social norms and simplified letters were most effective at reducing excessive contributions to the TFSAs.
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