Tax Evasion - Moral & Ethical Considerations

...

H1: Citizen’s Ethical Attitude has significant effect on Moral actions.

2. Demographic Effect on Ethical Attitude

H0: Demographic differences has no significant effect on Ethical Attitudes.

H1: Demographic differences has significant effect on Ethical Attitudes.

5. Executive Summary

We have taken responses up to 7th May 2016 and the data entry was manually done first in Excel and copy pasted to IBM SPSS (ver. 22) for further analysis and interpretation of the survey data.

The methodology followed is listed below:

Step 1: Factor Analysis. (separately for Section 1, 2, 3).

Step 2: Linear Regression.

Step 3: Reliability Test

Step 4: Discriminant Analysis

Step 5: Conclusion

Three surrogate variables (S1Q5, S2Q2, S3Q2) were identified as the three key factors (Ethical Code – EC; Individual Ethics – EI; Scenario Response -SR). Several significant factors and constructs were identified during factor analysis (refer to factor analysis). Null Hypothesis with respect to relationship between Ethical and Moral actions was rejected. Alternate Hypothesis of Demographic Effect on Ethical attitude was not accepted as model was not significant.

---------------------------------------------------------------

6. Methodology / Research Design

The research was based on responses obtained from questionnaires manually filled in by the respondents. Online survey methods were eschewed in favour of smaller sample from educated (English knowing), middle and upper middle class respondents to ensure adequate response and save time, because due to the length of the questionnaire being employed in this research we feared failure rate of online survey would have been very high. Considering the drop out percentage obtained, we would consider it prescient that we eschewed online survey in favour of manually obtaining survey responses.

Details of Questionnaire

The survey questionnaire was quite exhaustive and covered a gamut of responses. The questionnaire was made up Six Sections having a total of 55 questions, with a majority of the questions having Likert scale type responses between 1 to 5 or 1 to 7.

Section 1 has twenty questions of general moral and ethical nature. Section 2 contains twelve questions querying about the respondents’ personal ethical attitudes. Section 3 contains a Tax Evasion scenario based questions. Section 4 and 5 constitute the ethical decisions vis-à-vis the scenario and personal choice in similar circumstances, respectively. Section 6 queries about the demographic profile of the respondents.

Survey Analysis

Out of 150 survey questionnaires handed out to potential respondents, we received responses to only 106, with a dropout rate of almost 29.33%. On further screening of the responses 8 responses were found to be either incomplete, inconsistent, with multiple markings or illegible /confusing and had to be rejected by the surveyors. Hence, total number of valid responses employed in the SPSS Analysis is 98. Thus, the percentage of valid responses (98) to the total number of responses obtained (106) is 92.45%

The high dropout and rejection rate was possibly due to a) apathy of the respondents due to lengthy questionnaire and, or b) Lack of understanding of the questionnaire (due to usage of nuanced English).

Selection of Survey Respondents

The selection of Survey Respondents was skewed towards educated, English speaking, middle and upper class urban respondents from Jamshedpur and major metros in India. Thus, the research outcomes may not be representative of lower middle class and lower class demographics and therefore it may not be advisable to extrapolate the findings of the research to the entire population, without first reconfirming the findings / conclusions through a more detailed and inclusive survey/research.

---------------------------------------------------------------

7. Factor Analysis

Separate Exploratory Factor analysis for each of the Section I, II & II was done to identify the Factors or Constructs i.e. structure / inter relationship among the variables. Clear Factor solutions obtained for factor loadings >0.4 after removing cross-loading items.

A) Section 1 Factor Analysis

[pic 4]

a. Clear Factor Solution

Steps

Nos. Removed

Outgoing Variables

Reason

1

0

-

Non Loading

2

3

S1Q13, S1Q17, S1Q10

Cross-Loading

3

1

S1Q9

Cross-Loading

4

1

S1Q6

Cross - Loading

Obtained a 4 factor Clear solution. 5 Variables out of 20 Variables in Section 1 have been filtered out after Factor Analysis.

b. Surrogate Variable

Factor/s

Factor Label

Variables

1

2

3

4

1

Ethical