Is benefit fraud more or less wrong than tax evasion?

Economic psychology has traditionally focused on tax evasion, not giving enough attention to other ‘public finance’ offences such as benefit fraud; the present paper, therefore, aims to fill the gap and perform a first exploratory study on this subject. Questionnaire data were collected from 438 students in Italy and in the UK. Different scenarios of equal economic value concerning tax evasion (i.e. work off the books) and benefit fraud (i.e. falsely claimed unemployment/injury benefit) were presented both in the long and in the short-term, and respondents were asked to state on a four point Lykert-type scale whether they considered the activity wrong or not and what the appropriate fine should be. They were also asked whether they would engage in the activity or notthemselves. Finally, they were asked how prevalent they believed benefit fraud and tax evasion was in their own country and whether they would report such illegal activities to the authorities. In the Italian version of the questionnaire respondents were also asked to suggest the appropriate fine for other non-fiscal illicit behaviours (i.e. bicycle/motorbike theft; illegal music download; illegal DVDs selling; fraud aimed at elderly; insurance fraud). The results show that, considering an equal economic value, benefit fraud is perceived as more serious than tax evasion. Moreover, the Italian sample perceives tax evasion as a less serious offence compared to other illicit behaviours (including non-fiscal offences).By comparing attitudes towards tax evasion and benefit fraud, the punishments deemed appropriate, and the willingness to commit such crimes, several differences were found between the two different cultural contexts (UK and Italy). Italians would (on balance) impose higher fines for public finance crimes and are more likely to report someone cheating ‘the system’ to the authorities, but at the same time, they say they are more likely to cheat themselves. There seems to be a split between what they wish for themselves and what they wish for others. An interesting difference can be observed considering the unemployed benefit fraud: the Italian sample, compared to the English one, shows a more indulgent attitude towards this offence and declares to be more likely to commit it (both in the short and in the long run). Furthermore, Italians see both tax evasion and benefit fraud as more prevalent estimating that, on average, half of the Italian population is engaged in these public finance offences. Finally, the article highlights strengths, limitations and future directions of the study.