Teimuraz Gogsadze, a graduate of ISET's Class of 2011, joined the International Taxation Division of the Tax Policy Department at the Ministry of Finance of Georgia in May 2011. He worked on such interesting projects as the double taxation avoidance agreement and agreements on mutual administrative assistance in customs matters, gaining invaluable experience at the Ministry of Finance. Having spent almost a year at the Ministry and inspired by the experience regarding taxation matters, Teimuraz decided to continue his studies with a Ph.D. program. In April 2012, he joined the Ph.D. program in Economics at the University of Leicester, where his supervisors were Professors Sanjit Dhami and Ali al-Nowaihi.

Teimuraz’s research interests lie in behavioral economics in general. Specifically, all three chapters of his Ph.D. thesis, entitled “Tax Compliance: A Behavioral Economics Approach", belong to the domain of behavioral public finance and concern the tax evasion behavior of individuals.

In the first chapter of his thesis, Teimuraz studies the tax compliance behavior of a taxpayer using the decision theory of Koszegi and Rabin (2006, 2007). Regardless of the substantial empirical support, the theory fails to explain the central behavioral phenomenon of the tax evasion literature that evasion increases in the tax rate. In the second chapter, using the cumulative prospect theory of Tversky and Kahneman (1992) and the psychological phenomenon of hedonic adaptation, the author shows that the announcement of a tax rate change increases evasion in the transition period (a period after the announcement and before the actual enforcement of the new tax rate). The enforcement of a new tax rate is found to have long-run effects on evasion - an increase in the tax rate increases evasion, whereas a reduction in tax rate reduces evasion. The last chapter suggests that tax policy parameters not only shape monetary (dis)incentives for compliance but also determine the strength of the social norm of compliance. The norm of compliance is found to be weaker under the higher tax rate and the norm is stronger under the stricter tax enforcement regime.

Teimuraz successfully defended his Ph.D. thesis in October 2016 and was awarded the degree on November 9th, 2016. His full thesis is available here.

After completing his Ph.D. studies, Teimuraz returned to Georgia. His main aim is to introduce and popularize the field of behavioral economics to Georgian universities through lecturing and research. He is also looking forward to collaborating with Georgian non-governmental and governmental institutions as a consultant and policy advisor.