We study the causal effects of tax credit schemes for household services on consumers’ preferences for different attributes of the services and their willingness to pay for legality. Therefore, we implement a randomized control trial within a survey of consumers in Germany. Survey participants will be recruited by a survey agency (Consumer field works) and interviewed with an online questionnaire.
The survey participants will be randomly assigned to three treatments. The first treatment is the baseline scenario. Respondents in this scenario will be informed that there is no tax credit available when they demand household services. The second treatment is a scenario in which the survey participants are informed about the existence of a tax credit that is granted “at source”, i.e., at the time of service consumption as in Sweden. If consumers decide to demand a legal service they can benefit from an immediate price reduction of 20% in form of a tax credit. The third treatment is a scenario in which the consumers are informed about the existence of a tax credit that can be claimed with the annual tax return, i.e., the consumers receive the credit with delay, as in Germany. If consumers choose the legal service they can deduct 20% of the price of that service from their tax bill.
The outcomes of interest in this study are, first, the preferences of consumers for different attributes of the service, namely the receipt of an invoice, the price, whether the service provider was recommended by a friend or the availability of the provider. Second, we are interested in consumers' willingness to pay for a legal service. We identify this parameter by using a discrete choice experiment. We confront each respondent with seven choice sets. In each choice set, we contrast the offers from two service providers that may differ in the four mentioned attributes (legality, price, availability, recommendation). Overall we consider 70 different choice sets that are clustered in 10 blocks. Each respondent is randomly confronted with one block (7 choice sets). The answers to these choice sets allow us to identify how much weight is given to each attribute by consumers and we can also estimate their willingness to pay for legality, i.e., how much they are willing to pay more for a legal service.