Sherry Xin Li

Social Identities, Ethnic Diversity, and Tax Morale

This article investigates the impact of individuals’ social identities on their tax attitudes and how these effects on the micro level are translated to the impact of a country’s ethnic heterogeneity on the public’s overall tax morale. The author finds that both ethnic and national identities play important roles shaping tax morale, and these effects depend on the country’s population heterogeneity. Overall, ethnically fractionalized countries have poorer tax morale than homogeneous ones, suggesting a higher cost of tax collection for the former. This is consistent with previous findings that suggest detrimental impact of ethnic fractionalization on public sector performance.

Common identity and the voluntary provision of public goods: An experimental investigation

We conduct a framed field experiment in two Dallas neighborhoods to examine how common identity affects individual contributions to local public goods. The participants’ common identity is primed to make neighborhood membership salient before individuals make donations to local non-profit organizations. We find that the identity treatment is sensitive to community context. It decreases the likelihood of giving in the struggling, poor neighborhood, but its impact is positive, albeit statistically insignificant, in the low- to middle-income neighborhood. In addition, the identity treatment triggers participants’ perceptions or memories of experiences with their communities which in turn lead to the treatment differences across the two communities. Our findings reveal the limitations on the power of common group identity in influencing individual economic decision making, which has been largely overlooked in the literature.

Communication and visibility in public goods provision

We design a public goods laboratory experiment in both a virtual world environment and an abstract computerized environment, each with and without communication and visibility, to investigate how communication and visibility of other participants affect individual contributions to public goods. In both environments, the presence of communication significantly and consistently improves public good contributions. However, the interaction between communication and visibility differs in the two environments. While the two dimensions are substitutes in the abstract computerized environment, they work in a complementary way to increase public goods contributions in the virtual world environment. Chat content analysis further shows that positive reinforcement and monitoring have a positive impact on cooperation, but dissent has a negative impact.