Preference-Directed Regulation When Ethical Environmental Policy Choices Are Formed With Limited Information
Preference-directed regulation (PDR) can supplement traditional environmental policies through frequent regulatory revision (Livermore, 2007). Stakeholders can use PDR to garner popular support for a specific policy. By providing individuals with information that augments their opinions about the effectiveness of a policy at driving environmental outcomes, stakeholders can induce preference switching in favor of or in detriment to a specific policy. This paper documents the extent to which this is true using cross-sectional data from an original national survey where individuals were asked to choose one of three policies aimed at reducing the number of products manufactured in environmentally damaging ways. Proxies for policy-specifc opinions about the effectiveness of each policy are extracted from the data and form the central focus of inducing preference switching. PDR is operationalized by exogenously augmenting individual opinions via counterfactual simulations within a limited information discrete choice model. The results demonstrate that the extent of preference switching depends not only on the relative change in opinion for a specific policy, but that different forms of PDR may be more effective at inducing preference switching. The substitution patterns arising from the counterfactual simulations are further explained by analytically demonstrating the mitigation of the Independence of Irrelevant Alternatives property endemic to traditional multinomial choice models (i.e., full information). Additional empirical results are documented by comparing the results to a full information model, including downward bias in mean utility levels and individual-level preference switching across the limited and full information conditional choice utilities.
|Date of creation:||Nov 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.zwickcenter.uconn.eduEmail:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Raj Chetty & Adam Looney & Kory Kroft, 2009.
"Salience and taxation: theory and evidence,"
Finance and Economics Discussion Series
2009-11, Board of Governors of the Federal Reserve System (U.S.).
- Looney, Adam & Kroft, Kory & Chetty, Raj, 2009. "Salience and Taxation: Theory and Evidence," Scholarly Articles 9748525, Harvard University Department of Economics.
- Raj Chetty & Adam Looney & Kory Kroft, 2007. "Salience and Taxation: Theory and Evidence," NBER Working Papers 13330, National Bureau of Economic Research, Inc.
- Lawrence H. Goulder & Ian W. H. Parry, 2008.
"Instrument Choice in Environmental Policy,"
Review of Environmental Economics and Policy,
Association of Environmental and Resource Economists, vol. 2(2), pages 152-174, Summer.
- Eftichios Sartzetakis & Anastasios Xepapadeas & Emmanuel Petrakis, 2012. "The Role of Information Provision as a Policy Instrument to Supplement Environmental Taxes," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 52(3), pages 347-368, July.
- Swait, Joffre & Ben-Akiva, Moshe, 1987. "Incorporating random constraints in discrete models of choice set generation," Transportation Research Part B: Methodological, Elsevier, vol. 21(2), pages 91-102, April.
- Michelle Sovinsky Goeree, 2008. "Limited Information and Advertising in the U.S. Personal Computer Industry," Econometrica, Econometric Society, vol. 76(5), pages 1017-1074, 09.
- Draganska, Michaela & Klapper, Daniel, 2010. "Choice Set Heterogeneity and the Role of Advertising: An Analysis with Micro and Macro Data," Research Papers 2063, Stanford University, Graduate School of Business.
- John A., List & Daniel, Sturm, 2006.
"How Elections Matter: Theory and Evidence from Environmental Policy,"
Discussion Papers in Economics
768, University of Munich, Department of Economics.
- John A List & Daniel M Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1249-1281, November.
- List, John & Sturm, Daniel M, 2004. "How Elections Matter: Theory and Evidence from Environmental Policy," CEPR Discussion Papers 4489, C.E.P.R. Discussion Papers.
- John A. List & Daniel M. Sturm, 2004. "How Elections Matter: Theory and Evidence from Environmental Policy," NBER Working Papers 10609, National Bureau of Economic Research, Inc.
- Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March.
- Martha A. Starr, 2009.
"The social economics of ethical consumption: Theoretical considerations and empirical evidence,"
2009-07, American University, Department of Economics.
- Starr, Martha A., 2009. "The social economics of ethical consumption: Theoretical considerations and empirical evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 916-925, December.
- Eftichios Sartzetakis & Anastasios Xepapadeas & Emmanuel Petrakis, .
"The role of information provision as a policy instrument to supplement environmental taxes: Empowering consumers to choose optimally,"
DEOS Working Papers
1012, Athens University of Economics and Business.
- Eftichios S. Sartzetakis & Anastasios Xepapadeas & Emmanuel Petrakis, 2009. "The role of information provision as a policy instrument to supplement environmental taxes: Empowering consumers to choose optimally," Discussion Paper Series 2009_02, Department of Economics, University of Macedonia, revised Jan 2009.
- Sartzetakis, Eftichis & Xepapadeas, Anastasios & Petrakis, Emmanuel, 2008. "The role of information provision as a policy instrument to supplement environmental taxes: Empowering consumers to choose optimally," MPRA Paper 12083, University Library of Munich, Germany.
- Eftichios S. Sartzetakis & Anastasios Xepapadeas & Emmanuel Petrakis, 2009. "The Role of Information Provision as a Policy Instrument to Supplement Environmental Taxes: Empowering Consumers to Choose Optimally," Working Papers 2009.46, Fondazione Eni Enrico Mattei.
- David Konisky, 2011. "Public Preferences for Environmental Policy Responsibility," Publius: The Journal of Federalism, Oxford University Press, vol. 41(1), pages 76-100, Winter.
- Roger Haefen, 2008. "Latent Consideration Sets and Continuous Demand Systems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 41(3), pages 363-379, November.
- Portney, Paul & Oates, Wallace, 2001.
"The Political Economy of Environmental Policy,"
dp-01-55, Resources For the Future.
- Ching, Andrew & Erdem, Tulin & Keane, Michael, 2007.
"The Price Consideration Model of Brand Choice,"
4686, University Library of Munich, Germany.
- Daniel Houser & Rebecca Morton & Thomas Stratmann, 2008.
"Turned Off or Turned Out? Campaign Advertising,Information, and Voting,"
1005, George Mason University, Interdisciplinary Center for Economic Science, revised Jul 2008.
- Houser, Daniel & Morton, Rebecca & Stratmann, Thomas, 2011. "Turned on or turned out? Campaign advertising, information and voting," European Journal of Political Economy, Elsevier, vol. 27(4), pages 708-727.
- John Calfee & Clifford Winston & Randolph Stempski, 2001. "Econometric Issues In Estimating Consumer Preferences From Stated Preference Data: A Case Study Of The Value Of Automobile Travel Time," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 699-707, November.
- Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
- John Loomis & Bryon Allen, 2008. "Using Non Market Valuation to Inform the Choice Between Permits and Fees in Environmental Regulation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(3), pages 329-337, July.
- Martínez-Espiñeira, Roberto & Lyssenko, Nikita, 2011. "Correcting for the endogeneity of pro-environment behavioral choices in contingent valuation," Ecological Economics, Elsevier, vol. 70(8), pages 1435-1439, June.
- Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, September.
- Ascensión Andina-Díaz, 2007. "Reinforcement vs. change: The political influence of the media," Public Choice, Springer, vol. 131(1), pages 65-81, April.
- George R. Parsons & GAndrew J. Plantinga & GKevin J. Boyle, 2000. "Narrow Choice Sets in a Random Utility Model of Recreation Demand," Land Economics, University of Wisconsin Press, vol. 76(1), pages 86-99.
- Gunne Grankvist & Ulf Dahlstrand & Anders Biel, 2004. "The Impact of Environmental Labelling on Consumer Preference: Negative vs. Positive Labels," Journal of Consumer Policy, Springer, vol. 27(2), pages 213-230, June.
- Lupia, Arthur, 1994. " The Effect of Information on Voting Behavior and Electoral Outcomes: An Experimental Study of Direct Legislation," Public Choice, Springer, vol. 78(1), pages 65-86, January.
When requesting a correction, please mention this item's handle: RePEc:zwi:wpaper:01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.