The behavioral effect of Pigovian regulation: Evidence from a field experiment
Autor: | Luca A. Panzone, Jules-Daniel Wurlod, Timothy Swanson, Bruno Lanz |
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Rok vydání: | 2018 |
Předmět: |
Economics and Econometrics
Field experiment 05 social sciences Embodied carbon Management Monitoring Policy and Law Relative price Microeconomics Prosocial behavior 0502 economics and business Economics Price signal Product (category theory) 050207 economics Externality Consumer behaviour 050205 econometrics |
Zdroj: | Journal of Environmental Economics and Management. 87:190-205 |
ISSN: | 0095-0696 |
Popis: | Pigovian regulation provides monetary penalties/rewards to incentivize prosocial behavior, and may thereby trigger behavioral effects beyond a more standard response associated with a change in relative prices. This paper quantifies the magnitude of these behavioral effects using data from an experiment on real product choices together with a structural model of consumer behavior. First, we show that information about external effects (products' embodied carbon emissions) triggers voluntary substitution towards cleaner alternatives, and we estimate that this effect is equivalent to a change in relative prices of GBP30.69-165.15/tCO 2 . Second, comparing a Pigovian intervention (GBP19/tCO 2 ) with a neutrally-framed price change of the same magnitude, we find a negative behavioral effect associated with regulation. Compensating this bias would require increasing the Pigovian price signal by up to 48.06/tCO 2 . Finally, based on a cross-product comparison, we show that the magnitude of behavioral effects declines with substitutability between clean and dirty product alternatives, a measure of effort to reduce emissions. |
Databáze: | OpenAIRE |
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