Recent Publications

On the Effects of Transfer Pricing Regulations: A Developing Country Perspective

Journal of Public Economics, forthcoming


Multinational profit shifting is a major concern for low and middle income countries (LMICs). Many have enacted anti-profit shifting rules in order to constrain this type of tax avoidance behavior. Yet, not much is known on the rules' effects. We offer a first empirical assessment, providing two pieces of evidence: First, we draw on macro data for more than 120 LMICs for a 30-year-period and show that the introduction of transfer pricing (TP) rules - provisions that constrain profit shifting from mis-pricing of intra-firm trade - significantly increased corporate tax revenue collection in LMICs. Second, we use rich tax administrative and trade data for South Africa to provide "first-stage" evidence for firms' behavioral response to stricter TP provisions: we establish that a tightening of South African TP rules reduced intra-firm trade mis-pricing and increased taxable income reporting of affected multinational firms.

 A Data-Driven Procedure to Determine the Bunching Window
An Application to the Netherlands

International Tax and Public Finance, forthcoming


We extend the bunching approach introduced by Saez (2010) by proposing an intuitive, data-driven procedure to determine the bunching window. Our method explicitly allows the bunching window to be asymmetric around the threshold and to be more flexible. It also enhances the reproducibility of studies implementing the bunching approach. In our application to identify taxpayers' responsiveness to taxation for the Netherlands, we find clear evidence of bunching behaviour at all three thresholds of the Dutch tax schedule with a precise estimated elasticity of 0.023 at the upper threshold. We find much larger estimates for women and self-employed individuals. We also identify significant bunching behaviour for individuals in paid employment, which we can mostly attribute to tax deductions that can be shifted between married tax filers. Since bunching is absent among single tax filers, we conclude that real responses to taxation are modest.

 The Elasticity of Corporate Taxable Income - Evidence from South Africa

Economics Letters, 2019, 175, 43-46


The aim of this paper is to empirically investigate firm behaviour in response to corporate taxation in a low enforcement environment. Using the population of corporate tax returns in South Africa for 2009 to 2015, we analyse bunching in the distribution of taxable income at kinks in the tax schedule and estimate the elasticity of corporate taxable income with respect to statutory corporation tax rates. The analysis yields large elasticity estimates suggesting that corporate taxpayers react sensitively to tax incentives. Detailed information on assets, costs and tax deductions moreover allows us to analyse and discuss real versus evasion responses to taxation.

Goodbye Smokers’ Corner: Health Effects of School Smoking Bans

Journal of Human Resources27(4), 951–979.


In this paper, we study the impact of school smoking bans on individual health behavior in Germany. Using a multiple difference-in-differences approach in combination with randomization inference, we find that for individuals affected by a school smoking ban during their school time, the propensity toward smoking declines by 14 to 22 percent, while the number of smoked cigarettes per day decreases by 19 to 25 percent. After elaborating on treatment effect heterogeneity and intensity, we evaluate spillovers to smoking behavior of non-treated individuals living in the same household.

Does Regulation Trade-Off Quality against Inequality? The Case of German Architects and Construction Engineers

British Journal of Industrial Relations, 2018, 57:4, 870-893


We exploit an exogenous price increase of 10% for architectural services to answer the question how price regulation affects income inequality and service quality. Using individual-level data from the German microcensus for the years 2006 to 2012, we find a significant reform effect of 8% on personal net income for self-employed architects and construction engineers. This group moved from the second lowest to the high- est quintile of the net income distribution. This increase in inequality is associated with a deterioration of service quality. The reform reduced average scores of a peer ranking for architects by 18%.

Prof Dr. Kristina Strohmaier

Any questions, ideas or fruitful comments? Please do not hestitate to contact me!

University of Duisburg-Essen, Universitätsstraße 12, 45117 Essen


Phone: +49 - (0) 201 18-33633