Taxation, health system endowment and quality of institutions: a "social" perception across Europe

Cafferata, Alessia and Cerruti, Gianluca and Mazzone, Giulio (2022): Taxation, health system endowment and quality of institutions: a "social" perception across Europe.

Abstract

In this paper we analyze how the health system endowment and the quality of the institutions impact on a change of perception towards taxation. We conduct a sentiment analysis on French, Germans, Italians and Spanish users' tweets to understand if the impact of the current health emergency has modified the tax compliance of the citizens of the four biggest European Countries. We use a difference-in-differences estimation strategy, by comparing the average sentiment of individual tweets regarding taxation in different European NUTS-2 regions, before and after the spread of the Covid-19 pandemic. Our results highlight that in regions characterized by higher levels of health expenditure, people become more prone towards taxation with respect to the period before the widespread of covid-19. In addition, we show how a higher quality of institutions lead to a more positive perception of the same in relative and absolute terms and therefore a greater predisposition for a more progressive tax system.

• Item Type: MPRA Paper
• Language: English
• Keywords: Taxation; Sentiment Analysis; Tax compliance; Health System Endowment; Quality of institutions; Covid-19 crisis.
• Subjects: C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data ; Data Access; D - Microeconomics > D0 - General > D04 - Microeconomic Policy: Formulation, Implementation, and Evaluation; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance; H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health

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