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Fairness, Information and Coalition Building in Tax Policy: An Experimental Learning Approach
Unformatted Document Text:  Appendix B. Documentation for Nested Logit Analysis Equations:Level 1: Pr[tax, notax] = fn (prefntax, ntax1, ntax2, politica, hhinc, hhsize, gender, inclu)Level 2: Pr[A, B, C] = fn (intcpt1, intcpt2, self, fair1, fair2, netdif, lagvote)Data File:Unit of analysis is a vote (one per player per round); N=380Each vote observation has four records representing four policy choices: policy = 0 -- No Taxespolicy = 1 -- A or F (income taxes)policy = 2 -- B or E (sales taxes)policy = 3 -- C or D (head taxes)The file contains 101 individuals in 9 runs with a total of 33 rounds of voting.Variables:taxpolicy – the dependent variable is coded 1 for the tax policy option chosen; zero otherwiseself – 1 indicates the policy with the highest net benefit (self-interest) for the player’s household; coded zero otherwise fair1 – 1 indicates the policy ranked as the fairest in the pre-run paper exercise, question 2 (full information); coded zero otherwise fair2 – 1 indicates the policy ranked as the second fairest in the pre-run paper exercise, question 2 (full information); coded zero otherwise netdif – the difference (positive) between the net benefit of the self-interest option and the net benefit of the present alternative; zero indicates the policy is the self-interest option for the player’s householdlagvote – the percentage of votes for that policy in the prior round; for round one, this is coded zeropolitica – ranges from -3 to +3, indicating Strong Democrat, Weak Democrat, Leaning Democrat, Independent (0), Leaning Republican, Weak Republican, Strong Republicanpolicy1 – constant term for policy 1 (income taxes)policy2 – constant term for policy 2 (sales taxes)politic1 – politica * policy1politic2 – politica * policy2prefntax – 1 indicates the respondent chose No Taxes as the best policy option for their household on the pre-run paper exercise, question 1 (limited information); coded zero otherwise ntax1 – 1 indicates the respondent chose No Taxes as the fairest policy on the pre-run paper exercise, question 2 (full information); coded zero otherwise ntax2 – 1 indicates the respondent chose No Taxes as the second fairest policy on the pre-run paper exercise, question 2 (full information); coded zero otherwise hhinc – household income (in real life, not as assigned in the experiment)hhsize – household size (in real life, not as assigned in the experiment)gender – 1 = male, 0 = femaleinclu – inclusive value estimated by the level 2 equation

Authors: Lovecraft, Amy.
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Appendix B. Documentation for Nested Logit Analysis
Equations:
Level 1: Pr[tax, notax] = fn (prefntax, ntax1, ntax2, politica, hhinc, hhsize, gender,
inclu)
Level 2: Pr[A, B, C] = fn (intcpt1, intcpt2, self, fair1, fair2, netdif, lagvote)
Data File:
Unit of analysis is a vote (one per player per round); N=380
Each vote observation has four records representing four policy choices:
policy = 0 -- No Taxes
policy = 1 -- A or F (income taxes)
policy = 2 -- B or E (sales taxes)
policy = 3 -- C or D (head taxes)
The file contains 101 individuals in 9 runs with a total of 33 rounds of voting.
Variables:
taxpolicy – the dependent variable is coded 1 for the tax policy option chosen; zero
otherwise
self – 1 indicates the policy with the highest net benefit (self-interest) for the player’s
household; coded zero otherwise
fair1 – 1 indicates the policy ranked as the fairest in the pre-run paper exercise,
question 2 (full information); coded zero otherwise
fair2 – 1 indicates the policy ranked as the second fairest in the pre-run paper exercise,
question 2 (full information); coded zero otherwise
netdif – the difference (positive) between the net benefit of the self-interest option and
the net benefit of the present alternative; zero indicates the policy is the self-interest
option for the player’s household
lagvote – the percentage of votes for that policy in the prior round; for round one, this is
coded zero
politica – ranges from -3 to +3, indicating Strong Democrat, Weak Democrat, Leaning
Democrat, Independent (0), Leaning Republican, Weak Republican, Strong Republican
policy1 – constant term for policy 1 (income taxes)
policy2 – constant term for policy 2 (sales taxes)
politic1 – politica * policy1
politic2 – politica * policy2
prefntax – 1 indicates the respondent chose No Taxes as the best policy option for their
household on the pre-run paper exercise, question 1 (limited information); coded zero
otherwise
ntax1 – 1 indicates the respondent chose No Taxes as the fairest policy on the pre-run
paper exercise, question 2 (full information); coded zero otherwise
ntax2 – 1 indicates the respondent chose No Taxes as the second fairest policy on the
pre-run paper exercise, question 2 (full information); coded zero otherwise
hhinc – household income (in real life, not as assigned in the experiment)
hhsize – household size (in real life, not as assigned in the experiment)
gender – 1 = male, 0 = female
inclu – inclusive value estimated by the level 2 equation


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