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Nudge and tax in an environmental public goods experiment: Does environmental sensitivity matter?

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  • Boun My, Kene
  • Ouvrard, Benjamin

Abstract

An experiment is proposed in which the subjects could contribute to a public good which could be thought of as reducing pollution, which was stochastic. A nudge (announcement of the socially optimal contribution) and a tax are implemented to improve the level of contributions. The environmental sensitivity and optimism of the subjects are also elicited. Our first result shows that the implementation of the nudge does not perform as well as the implementation of the tax. The reaction to the nudge depends directly on individuals’ environmental sensitivity, contrary to the reaction to the tax. Secondly, the nudge performs well with highly sensitive subjects only during the first half of its implementation. Lastly, the efficiency analysis shows that the implementation of the nudge significantly decreases the groups’ welfare for the least sensitive subjects, in comparison to the baseline.

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  • Boun My, Kene & Ouvrard, Benjamin, 2019. "Nudge and tax in an environmental public goods experiment: Does environmental sensitivity matter?," Resource and Energy Economics, Elsevier, vol. 55(C), pages 24-48.
  • Handle: RePEc:eee:resene:v:55:y:2019:i:c:p:24-48
    DOI: 10.1016/j.reseneeco.2018.10.003
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    More about this item

    Keywords

    C91; H41; Q58; Environmental sensitivity; Incentives; Nudge; Optimism; Tax;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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