Log-ratio analysis for monitoring tax process

Italian databases about tax disputes are available for several years. The Ministry of Economy and Finance analyzes these data quarterly, by using mostly univariate statistics. However, multidimensional and multivariate statistical analysis of tax proceedings becomes necessary to overcome the limits of univariate statistics. Here, we aim to study the association between the tax authorities and the geographic area of resolved tax disputes by applying the log-ratio analysis. The log-ratio analysis presents many advantages, among which, the computation and the visual representation of the odds ratios which represent a very simple measure of association.