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Student Research Reveals Way to Increase On-Time Tax Payments

June 19, 2017

Recent MPP graduate Tyler Gamble loves problem solving. When he discovered that Guilford County, N.C. had trouble collecting taxes for some residents on time, the North Carolina native saw an opportunity to build his master’s project around the issue.



Every year, Guilford County residents receive a “friendly reminder” letter in their mailboxes, reminding them to pay their taxes on time. Yet five percent of the people in the county fail to do so. Attempting to find a feasible solution to this problem, Gamble asked himself whether small changes to the reminder letter could be a step in the right direction.

It turns out, a personalized, handwritten note can indeed go a long way. Simply by adding the words “[Name] you really need to open this” to the outside of the envelope and changing the text of the letter from "Friendly Reminder" to "Pay Now - 7 out of 10 Guilford County Residents Have Already Paid" Tyler Gamble found that the likelihood of a full on-time payment increased by over 30 percent.

Changing the letter itself, and not adding the handwritten note increased the likelihood of payment by 12 percent.

When Gamble presented his findings to a group of Guilford County’s local government representatives, he explained why the changes worked. Adding a handwritten note triggers something known in behavioral economics as reciprocity. Because someone took time to hand-write a note on the letter, the rule of reciprocity indicates that the taxpayer would feel subtle social pressure to open the letter.

Gamble argues the handwritten note “triggers a sense of empathy” and “takes away this idea of this kind of faceless bureaucracy,” ultimately resulting in increased on-time payments.

Guilford County’s Tax Director Greg French said he was “pleasantly and greatly” surprised by the results of Gamble’s research.

Senior Budget Analyst Jason Jones agreed. “I actually kind of threw my hand up a little bit in my office because it was like ‘Yes, this worked!,'" Jones said.

After the successful completion of his MPP studies this past May, Tyler Gamble hopes to apply his problem-solving skills in behavioral economics, human-centered design, and process improvement to public-sector challenges. The Ashe County, N.C. native is particularly interested in urban transportation, criminal justice, drug policy, education, and economic development.


Professor Dan Ariely talks on Sanford's Ways & Means podcast about applying behavioral economics to government innovation. Listen:

Read transcript.