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A tax can nudge: The impact of an environmentally motivated bonus/malus fiscal system on transport preferences

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  • Hilton, Denis
  • Charalambides, Laetitia
  • Demarque, Christophe
  • Waroquier, Laurent
  • Raux, Charles

Abstract

Bonus-malus taxes appear to have been successful in encouraging people to change to less polluting travel options in France (e.g. the tax on large and small engined cars). We hypothesize that they have three possible effects on consumer behaviour. The positive effects are: (1) a price effect (the less polluting option is subsidized and the polluting option is taxed); and (2) a social norm effect (the less polluting option is classified as pro-social and the polluting option as antisocial). The negative effect (3) is that they may decrease intrinsic motivation (crowding out). We provide an initial test of this tripartite model using survey data on students given a choice between taking the plane or the train between Toulouse to Paris. The first study shows that imposing a hypothetical bonus-malus tax has both a price effect (relative to a control condition where only the norm justifying the tax is presented) and a norm effect (relative to a control condition in which only the corresponding price difference is presented without mention of the tax). The second study presents a set of choices where the environmental norms and price differences are held constant, but the size of the contribution of the bonus-malus tax to the final price of each option is varied. This study confirms our prediction that a larger bonus-malus subsidy/tax reduces propensity to choose the less polluting option (i.e. the train). As the positive effects outweigh the negative effects in most of the choices studied, we conclude that bonus-malus taxes constitute a promising policy instrument.

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  • Hilton, Denis & Charalambides, Laetitia & Demarque, Christophe & Waroquier, Laurent & Raux, Charles, 2014. "A tax can nudge: The impact of an environmentally motivated bonus/malus fiscal system on transport preferences," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 17-27.
  • Handle: RePEc:eee:joepsy:v:42:y:2014:i:c:p:17-27
    DOI: 10.1016/j.joep.2014.02.007
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    Cited by:

    1. Alberini, Anna & Bareit, Markus & Filippini, Massimo & Martinez-Cruz, Adan L., 2018. "The impact of emissions-based taxes on the retirement of used and inefficient vehicles: The case of Switzerland," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 234-258.
    2. Cristiano Codagnone & Giuseppe Alessandro Veltri & Francesco Bogliacino & Francisco Lupiáñez-Villanueva & George Gaskell & Andriy Ivchenko & Pietro Ortoleva & Francesco Mureddu, 2016. "Labels as nudges? An experimental study of car eco-labels," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(3), pages 403-432, December.
    3. Rachel Croson & Nicolas Treich, 2014. "Behavioral Environmental Economics: Promises and Challenges," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 335-351, July.
    4. Mbara, Gilbert & Tyrowicz, Joanna & Kokoszczynski, Ryszard, 2020. "Striking a balance: Optimal tax policy with labor market duality," Journal of Macroeconomics, Elsevier, vol. 66(C).
    5. Charles Collet & Pascal Gastineau & Benoit Chèze & Pierre-Alexandre Mahieu & Frederic Martinez, 2022. "Combining economics and psychology: Does CO2 framing strengthen pro-environmental behaviors?," Working Papers hal-03321706, HAL.
    6. Pamela Mcelwee & Esther Turnout & Mireille Chiroleu-Assouline & Jennifer Clapp & Cindy Isenhour & Tim Jackson & Eszter Kelemen & Daniel C Miller & Graciela Rusch & Joachim H Spangenberg & Anthony Wald, 2020. "Ensuring a Post-COVID Economic Agenda Tackles Global Biodiversity Loss," PSE-Ecole d'économie de Paris (Postprint) halshs-02954370, HAL.
    7. Raux, Charles & Chevalier, Amandine & Bougna, Emmanuel & Hilton, Denis, 2021. "Mobility choices and climate change: Assessing the effects of social norms, emissions information and economic incentives," Research in Transportation Economics, Elsevier, vol. 90(C).
    8. Ackermann, Hagen & Fochmann, Martin & Temme, Rebecca, 2018. "Behavioral responses to subsidies in risky investment decisions and the effectiveness of tax credits and grants," arqus Discussion Papers in Quantitative Tax Research 226, arqus - Arbeitskreis Quantitative Steuerlehre.
    9. Drews, Stefan & Exadaktylos, Filippos & van den Bergh, Jeroen C.J.M., 2020. "Assessing synergy of incentives and nudges in the energy policy mix," Energy Policy, Elsevier, vol. 144(C).
    10. Jacqueline Arriagada & Claudio Mena & Marcela Munizaga & Daniel Schwartz, 2023. "The effect of economic incentives and cooperation messages on user participation in crowdsourced public transport technologies," Transportation, Springer, vol. 50(5), pages 1585-1612, October.
    11. Le Goff, Alix & Monchambert, Guillaume & Raux, Charles, 2022. "Are solo driving commuters ready to switch to carpool? Heterogeneity of preferences in Lyon's urban area," Transport Policy, Elsevier, vol. 115(C), pages 27-39.
    12. Marek, Ewelina & Raux, Charles & Engelmann, Dirk, 2018. "Personal carbon allowances: Can a budget label do the trick?," Transport Policy, Elsevier, vol. 69(C), pages 170-178.
    13. Luca A. Panzone & Natasha Auch & Daniel John Zizzo, 2024. "Nudging the Food Basket Green: The Effects of Commitment and Badges on the Carbon Footprint of Food Shopping," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 89-133, January.
    14. Panzone, Luca A. & Ulph, Alistair & Zizzo, Daniel John & Hilton, Denis & Clear, Adrian, 2021. "The impact of environmental recall and carbon taxation on the carbon footprint of supermarket shopping," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    15. Harpenau, Franziska & Magalhaes, Katrin Marques & Steffen, Nico & Wiewiorra, Lukas, 2023. "Saving behaviors of private households under varying tariff structures, price levels and incentives - Experimental evidence," WIK Working Papers 7, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH, Bad Honnef.
    16. Stauch, Alexander & Gamma, Karoline, 2020. "Cash vs. solar power: An experimental investigation of the remuneration-related design of community solar offerings," Energy Policy, Elsevier, vol. 138(C).
    17. Papoutsi, Georgia S. & Nayga, Rodolfo M. & Lazaridis, Panagiotis & Drichoutis, Andreas C., 2015. "Fat tax, subsidy or both? The role of information and children's pester power in food choice," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 196-208.
    18. Luca Panzone & Natasha Auch & Daniel Zizzo, 2022. "Nudging The Food Basket Green: The Effects Of Commitment And Badges On The Carbon Footprint Of Food Shopping," Discussion Papers Series 652, School of Economics, University of Queensland, Australia.
    19. Charles Raux & Amandine Chevalier & Emmanuel Bougna & Denis Hilton, 2015. "Mobility Choices and Climate Change: Assessing the Effects of Social Norms and Economic Incentives through Discrete Choice Experiments," Post-Print halshs-01158088, HAL.

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    More about this item

    Keywords

    D03; L91; H23; Q58; 3900; 3920; 4000; 4070; 4090; Behavioral economics; Consumer behavior; Conventions and norms; Environment; Social influence; Taxation;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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