Nav: Home

Left wingers twice as likely to punish companies for tax avoidance, study finds

January 16, 2017

The study, published today in Journal of Business Research, examines how consumers react to media reports about company tax strategies and whether political ideology affects these reactions.

The study found that reading about tax avoidance causes a 12 per cent decrease in the average purchase intention (rated from '1 - definitely do not intend to purchase' to '7 - definitely intend to purchase) among consumers.

The results show marked differences in the attitudes of left wing and right wing consumers. Reading about tax avoidance causes a 16 per cent drop in the purchase intention among left wingers and an eight per cent drop among right wingers.

According to Dr Paolo Antonetti, author of the study and Lecturer in Marketing at QMUL School of Business and Management: "Simply put, this is because left wingers tend to see tax avoidance as a moral issue. If a company's target market includes a big group of liberal left wingers then media reports of tax avoidance may well hurt the bottom line, and will at the very least affect how the company is perceived among consumers."

The study found that even right wing voters react negatively to brands they care about aggressively avoiding tax. When the brand evaluated is already well regarded by consumers there is a 13 per cent drop in the purchase intention among left wingers and a 17 per cent drop among right wing voters.

"This is interesting because it shows that the effect on the company is quite strong. If a consumer cares about a brand then they don't like to read about aggressive tax avoidance - regardless of political ideology," said Dr Antonetti.

While aggressive tax avoidance strategies reduce consumers' intention to purchase, companies are not necessarily rewarded for conservative (i.e. abiding by the 'spirit of the law') tax strategies. Reading about conservative tax policies increases consumer purchase intentions by just four per cent (a variation which is not statistically significant).

"This suggests that consumers are willing to punish what they perceive as bad behaviour, but they won't necessarily reward good behaviour. This could be because consumers expect - at a minimum - a high level of tax compliance and are unwilling to say 'well done' for doing what the average tax payer is expected to do anyway," said Dr Antonetti.

He added: "Companies should be aware that aggressive tax avoidance strategies, in addition to being unethical, are also risky because they alienate consumers. Perhaps the most important lesson from our research is that existing customers feel disappointed when a company they are loyal to engages in tax avoidance."


Two online experiments were conducted for this study. For the first part of the study 402 US residents were recruited online. Participants were randomly exposed to three different profiles of the same (fictitious) company. The profiles manipulated information about tax strategies. The control condition had no information about tax strategy.

For the second part of the study 306 US participants recruited online evaluated the same information from the first study but in relation to a real company which was either 'close' to them (i.e. their favourite sportswear brand) or 'distant' from them (i.e. their least favourite sportswear brand). All data reported relates to the second part of the study.
More information:

  • 'Consumer reactions to corporate tax strategies: The role of political ideology' by P. Antonetti was published in the January edition of Journal of Business Research [link]
  • Full paper is available on request

Queen Mary University of London

Related Consumers Articles:

'Locally grown' broccoli looks, tastes better to consumers
In tests, consumers in upstate New York were willing to pay more for broccoli grown in New York when they knew where it came from, Cornell University researchers found.
Should patients be considered consumers?
No, and doing so can undermine efforts to promote patient-centered health care, write three Hastings Center scholars in the March issue of Health Affairs.
Consumers choose smartphones mostly because of their appearance
The more attractive the image and design of the telephone, the stronger the emotional relationship that consumers are going to have with the product, which is a clear influence on their purchasing decision.
When consumers don't want to talk about what they bought
One of the joys of shopping for many people is the opportunity to brag about their purchases to friends and others.
As consumers, how do we decide what's 'best' when it's not clear?
Imagine you are choosing between two resorts for your island vacation.
Effects of ethnocentrism on consumers
Aitor Calvo-Turrientes, winner of the prize for End-of-Degree Project in Sustainability in 2015 awarded by the Faculty of Economics and Business of the UPV/EHU-University of the Basque Country in Vitoria-Gasteiz, is the author of the paper 'The valuation and purchase of food products that combine local, regional and traditional features: The influence of consumer ethnocentrism,' published recently by the prestigious journal Food Quality and Preference.
Organic consumers mean business
Groundbreaking research from Aarhus BSS shows that organic consumers are standing fast and are buying more and more organic products following an increasingly predictable pattern.
Perfect mannequins a turnoff for some consumers
Mannequins' long legs, tiny waistlines and perfect busts can sour some shoppers on the products they're wearing, especially consumers who don't like the look of their own bodies.
What's in a name? For young Chinese consumers, it's about culture mixing
Younger, more cosmopolitan Chinese consumers tend to favor brand translations that keep both the sound and the meaning of the original name, says U. of I. business professor and branding expert Carlos J.
Why do consumers participate in 'green' programs?
From recycling to reusing hotel towels, consumers who participate in a company's 'green' program are more satisfied with its service, finds a new study co-led by a Michigan State University researcher.
More Consumers News and Consumers Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Listen Again: Reinvention
Change is hard, but it's also an opportunity to discover and reimagine what you thought you knew. From our economy, to music, to even ourselves–this hour TED speakers explore the power of reinvention. Guests include OK Go lead singer Damian Kulash Jr., former college gymnastics coach Valorie Kondos Field, Stockton Mayor Michael Tubbs, and entrepreneur Nick Hanauer.
Now Playing: Science for the People

#562 Superbug to Bedside
By now we're all good and scared about antibiotic resistance, one of the many things coming to get us all. But there's good news, sort of. News antibiotics are coming out! How do they get tested? What does that kind of a trial look like and how does it happen? Host Bethany Brookeshire talks with Matt McCarthy, author of "Superbugs: The Race to Stop an Epidemic", about the ins and outs of testing a new antibiotic in the hospital.
Now Playing: Radiolab

Dispatch 6: Strange Times
Covid has disrupted the most basic routines of our days and nights. But in the middle of a conversation about how to fight the virus, we find a place impervious to the stalled plans and frenetic demands of the outside world. It's a very different kind of front line, where urgent work means moving slow, and time is marked out in tiny pre-planned steps. Then, on a walk through the woods, we consider how the tempo of our lives affects our minds and discover how the beats of biology shape our bodies. This episode was produced with help from Molly Webster and Tracie Hunte. Support Radiolab today at