Taxes and benefits : two distinct options to cheat on the state?

In this paper we study the social norms to abstain from cheating on the state via benefit fraud and tax evasion. We interpret these norms (called benefit morale and tax morale) as moral goods, and derive testable hypotheses on whether their demand is determined by prices. Employing a large survey data set from OECD-member countries we provide robust evidence that the demand responds to price proxy variables as predicted by theory. The main general conclusions of this paper is that social norms (which are widely accepted as determinants of individual economic behaviour) are themselves influenced by economic factors. -- tax evasion ; benefit fraud ; tax morale ; benefit morale ; social norms