Is benefit fraud more or less wrong than tax evasion?

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