To improve use tax compliance, twenty-seven states have added a line to their income tax returns where taxpayers can report taxable sales. This article reports results of a behavioral study of a postcard “nudge” sent to income tax filers in one of those states, Nebraska, to encourage self-reporting of liability. The research question is whether the informational nudge was sufficient to alter self-reporting behavior. Data indicate that the nudge more than doubled the likelihood of use tax reporting and nearly doubled the amount of revenue collected, but the rate of use tax reporting remains extremely low. Probit models reveal that use tax reporting rises with income at a decreasing rate. Selection models are also estimated because of positive selection bias in the selection of the treatment group. Taken together, the results indicate that an informational nudge is not likely to be sufficient to substantially change use tax reporting behavior.

This study uses business survey data to analyze firm perceptions of infrastructure systems in transition countries as obstacles to conducting business. Factors that contribute to reported perceptions are modeled, including country macroeconomic conditions, firm characteristics, and measures of overall reforms and infrastructure system reforms. Identified obstacles arise from binding constraints that limit economic growth, reflect implicit shadow costs, and signal areas in need of policy reform or infrastructure investment. The analysis covers electric power, telecommunications, transportation, and water and wastewater infrastructure systems. Also examined is whether transition indicators of reforms, intended to reflect improvements, are associated with perceptions of obstacles. Beyond identifying infrastructure obstacles and the effects of reforms during the transition process, we also explore firm adoptions of new electronic technologies, essentially a new infrastructure system, as they use email, websites, cell phones, and high-speed Internet in their business activity.