Speaker：Fan Ziying ( Professor, School of Public Economics and Administration , Shanghai University of Finance and Economics)
Description：In China, for second-hand housing transactions,a business tax is levied on reported housing transaction prices once prices areabove a certain threshold. Under an environment with weak enforcement, reportedprices could deviate from true prices in response to the tax notch, creating anincentive for misreporting. We obtain from a large real estate broker company aunique dataset that includes both true and reported prices of second-handhousing transactions in Shanghai, which allows us to directly study themisreporting behavior. A simple tax evasion model predicts a novelthree-segment misreporting pattern against true prices: no misreporting forhouses with true prices below the notch; reported prices equal the notch valuefor true prices in a certain range above the notch; underreporting is largelyconstant for true prices well above the notch. The empirical misreportingpattern is remarkably consistent with theoretical predictions. In addition, weexplore how various factors may affect the misreporting pattern both theoreticallyand empirically. These factors include tax rate, housing loans, and a policythat imperfectly curbs evasion by setting a lower bound for misreporting.Potential alternative forms of the misreporting cost function are explicitlydiscussed and tested using data.
Time: March 25, 2019（Monday）, 9：30-11：00
Venue: Shahe No.1 Building, room 201
