Experimental Design
For Experiment 1, treatments include i) baseline information about Laramie, WY., ii) information about high quality public goods in Laramie, iii) information about the low-tax climate in Laramie, iv) information about natural amenities in Laramie, or v) all of the above. Subjects are then asked to state their willingness to move to Laramie and their expected life satisfaction associated with living there.
Experiment 2 allows us to answer three main questions:
Q1: Do people respond more strongly to the implementation of a tax as opposed to an increase in an existing one
a. We will do this by comparing stated willingness to move (and expected life satisfaction) among subjects assigned to the “income tax raise” treatment to those in the “income tax implement” treatment. We will also estimate whether the effect of tax implementation is more significant among people who live in an oil-rich state without an income tax (Wyoming, Texas, and Alaska).
b. We will also explore whether people are more opposed to an income tax (regardless of whether it is framed as being “implemented” or “raised”) among people in states without an income tax (Wyoming, Texas, and Alaska) compared to oil-rich states with an income tax.
Test 2: Which type of tax do people prefer?
a. We will test whether people have preferences over how they “lose” $1,000. We do this by testing people’s responses (willingness to move and expected life satisfaction) to three informational treatments: a) a hypothetical situation in which they pay $1,000 more in income tax, b) they pay $1,000 more in sales tax, and c) they lose $1,000 from a wage cut (all as a result of declining fossil-fuel revenue).
b. We will also test whether people have heterogeneous preferences over different types of taxes and/or spending cuts:
a. Income tax increase
b. Sales tax increase
c. Education spending cut
d. Health spending cut
Q3: Do people respond differently to taxes if they are framed as being in response to a negative oil shock?
a. We will compare responses (stated willingness to move and stated life satisfaction) among subjects who are assigned to tax increase treatments that are framed as being in response to a negative energy shock to those among people who are assigned to tax increase treatments that are not framed as being in response to a negative energy shock.
Finally, we will explore people’s preferences for different fiscal responses to negative energy shocks using a within-subject design in which we simply ask people to choose their preferred response. Here, we will explore peoples preferences again based on political ideology, income, and education level.