From the Price to the Crowding Effect
AbstractCrowding-Theory introduces a new psychological effect into economics. Under identifiable conditions, a higher price or stricter regulation reduces the intrinsic motivation to perform a task. Crowding-Out is the only effect which systematically works in the opposite direction to the Relative Price Effect. Crowding-Out Theory is empirically applied to two issues in Switzerland: (1) The support for siting a nuclear waste repository strongly fell when the population was offered a compensation for hosting it. (2) The possibility of direct participation in politics via referenda tends to raise civic virtue, and (ceteris paribus) tax compliance (Crowding-In Effect).
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Bibliographic InfoArticle provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.
Volume (Year): 133 (1997)
Issue (Month): II (June)
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- Alex Coad & Martin Binder, 2014.
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Economics Working Paper Archive
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