Variable

Prediction

Tax rate

Positively correlated with compliance on the basis of minimizing or averting risk

Audit Probability

Positively correlated with tax compliance. This stems from the fact that higher audit probabilities lessen tax evasion expected payoff

Fine rate or Penalty rate

Positively correlated with compliance because the upsurge in fine rate minimizes the expected payoff from tax evasion

Income

Negatively correlated with compliance based on decreasing absolute risk aversion