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Prices or bans: Understanding public preferences over policy options

Author

Listed:
  • Andor, Mark Andreas
  • Eßer, Jana
  • Lange, Andreas
  • Matejko, Leonie
  • Price, Michael Keith
  • Tomberg, Lukas

Abstract

When a policy goal is set or mandated, e.g., by a higher level of governance, policymakers have a range of instruments to choose from to reach this goal, such as pricing instruments or bans. However, implementation of such policies may fail when they lack public support. We thus study the determinants of public preferences for these instruments in two contexts using a survey experiment with more than 4,000 participants from the general German population. Respondents choose between pricing instruments and bans aimed towards the goals of reducing car traffic in city centers and sugar consumption, while we vary the price of the pricing instru- ment via the newly introduced Policy Price List. In addition, we vary the stringency of the ban, and information about policy effectiveness. We find that preferences over the presented policy options are sensitive to policy design for a large majority of respondents. Higher prices can both increase and decrease support for pricing, while more stringent bans are not necessarily less popular. In addition, perceived policy effectiveness matters: providing information about effectiveness increases support for the pricing instrument. By contrast, moral convictions and trait reactance primarily predict support for the policy goal itself rather than relative policy preferences.

Suggested Citation

  • Andor, Mark Andreas & Eßer, Jana & Lange, Andreas & Matejko, Leonie & Price, Michael Keith & Tomberg, Lukas, 2026. "Prices or bans: Understanding public preferences over policy options," Ruhr Economic Papers 1210, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:341633
    DOI: 10.4419/96973395
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    References listed on IDEAS

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    1. Hunt Allcott & Benjamin B Lockwood & Dmitry Taubinsky, 2019. "Regressive Sin Taxes, with an Application to the Optimal Soda Tax," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(3), pages 1557-1626.
    2. Carlsson, Fredrik & Johansson-Stenman, Olof & Kataria, Mitesh, 2024. "How Much Liberty Should We Have? Citizens versus Experts on Regulating Externalities and Internalities," Working Papers in Economics 841, University of Gothenburg, Department of Economics.
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    Keywords

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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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