Methodology and data

Chapter 4 outlines the most effective methodologies for capturing cultural dimensions in economic analysis, with a focus on survey-based approaches. Central to this discussion is the “Materialist–Postmaterialist 12-item Index” developed by Ronald F. Inglehart, the founder of the World Values Survey. This index offers valuable insights into societal preferences and priorities, thereby helping to explain cross-country variation in tax revenues as a share of GDP. Postmaterialism is assessed through the materialism/postmaterialism index introduced by Inglehart in 1977, which includes 12 items reflecting values such as the emphasis on wealth, financial security, and environmental protection. For our analysis, we utilise data from the most recent wave (Wave 7, 2017–2020), compiled by Haerpfer et al. (2020) in the dataset World Values Survey: Round Seven – Country Pooled Datafile. This represents a novel application of the index within an economic context, setting our research apart from previous studies. The chapter concludes by applying robust econometric and statistical methods to empirically verify the link between cultural values and tax systems.