This study uses a framed field experiment to investigate whether a subsidy is more than just a pure price decrease. Participants will be recruited from the ZEW Mannheim citizen panel. Registered citizens are invited to participate in an online survey. Additionally, new participants are recruited using random direct mails in the Mannheim area.
As part of this survey, participants are given a shopping budget and asked to either purchase a standard shower head or a water-saving shower head from that budget. Purchase decisions are incentivized in that we will implement the choice of a randomly selected subgroup. Each participant makes two of these purchase decisions: (1) at baseline prices and (2) at a reduced price for the water-saving head.
For the reduced-price decision two treatments are introduced. In the Price Decrease Treatment, participants are just presented a different price set without information of why the price for the efficient head decreased. In the Subsidy Treatment, participants receive the additional information that the price decrease stems from a subsidy.
The survey ends with incentivized questions to elicit beliefs about the water, money and carbon emission savings from the water-saving shower head, as well as the perceived norm on selecting the water-saving option. In addition, we elicit general attitudes on climate change and policy interventions.