Can combining tax and subsidy generate less public opposition than tax alone?

Last registered on February 07, 2023
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Pre-Trial

Trial Information

General Information

Title
Can combining tax and subsidy generate less public opposition than tax alone?
RCT ID
AEARCTR-0009099
Initial registration date
November 24, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 30, 2022, 3:27 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
February 07, 2023, 10:15 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
United Kingdom of Great Britain and Northern Ireland
Region

Primary Investigator

Name
Gøril Andreassen
Affiliation
School of Economics and Business, NMBU
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Other Primary Investigator(s)

PI Name
Steffen Kallbekken
PI Affiliation
Cicero
Contact Investigator
PI Name
Knut Einar Rosendahl
PI Affiliation
School of Economics and Business, NMBU
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Additional Trial Information

Status
Completed
Start date
2022-11-24
End date
2022-12-02
Keywords
Environment & Energy, Lab
Additional Keywords
Climate policy, pigouvian taxes, externalities, public support
JEL code(s)
H23, Q54, Q58
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Pigouvian taxes are politically difficult to introduce at a high enough rate because of opposition from the public. Subsidies on the other hand are often popular. How will a combination of tax and subsidies be considered by ordinary people, compared to each of the policy instruments in isolation? Will a combination of a tax and a subsidy generate less public opposition than tax alone? Is there a difference in the support if the combination is more tax than subsidies or if there is more subsidies than tax? We investigate this in an online interactive experiment.
External Link(s)

Registration Citation

Citation
Andreassen, Gøril, Steffen Kallbekken and Knut Einar Rosendahl. 2023. "Can combining tax and subsidy generate less public opposition than tax alone? ." AEA RCT Registry. February 07. https://doi.org/10.1257/rct.9099-2.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
The intervention is to study the support for policy with different combinations of tax and subsidy compared to only tax and only subsidy. The voting over policy is done for a fictitious market with externalities.
Intervention Start Date
2022-11-24
Intervention End Date
2022-12-02

Primary Outcomes

Primary Outcomes (end points)
The key outcome variable is the binary variable on whether the participants voted for a policy or not. There are five options: a tax, a subsidy or three different combinations of those two. We will compare the support for the different combinations with the tax and with the subsidy.
Primary Outcomes (explanation)
The variable vote will be equal to 1 if the participant vote for a policy in one of the treatments.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This is a lab experiment with a between-subjects design. The participants are recruited from the online platform Prolific.
Experimental Design Details
All interactions are anonymous.

The experiment consists of 2 parts with 1 round each. Before each participant can enter the experiment, (s)he will receive instructions and we will ask him/her some control questions to test that (s)he understands the instructions.

The participant is informed about the purpose of the project, which institution is responsible for the research project,
what participation involves for them, that participation is voluntary, the participants' personal privacy and the rights of the participants. Each participant has to consent to take part in the study.
Randomization Method
We randomize participants into the five different treatment groups according to the order in which they enter into the experiment and answer correctly on the control questions because the order people enter the experiment and answer control questions is random. We use this code to order the participants into the five different treatments: treatment = 1 + (groupNr-1) \% 5
Randomization Unit
Groups of three Prolific participants.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
500 groups.
Sample size: planned number of observations
1500 participants.
Sample size (or number of clusters) by treatment arms
1. 100 groups with in total 300 participants: Tax
2. 100 groups with in total 300 participants: Subsidy
3. 100 groups with in total 300 participants: A combination of tax (25%) and subsidy (75%)
4. 100 groups with in total 300 participants: A combination of tax (50%) and subsidy (50%)
5. 100 groups with in total 300 participants: A combination of tax (75%) and subsidy (25%)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
6 percentage points difference between the different treatment groups and the tax group or the subsidy group.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
The Institutional Review Board (IRB) at HH-NMBU
IRB Approval Date
2022-10-04
IRB Approval Number
HH-NMBU IRB 02/22
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
November 24, 2022, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
November 24, 2022, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
1641 participants
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
1641 participants
Final Sample Size (or Number of Clusters) by Treatment Arms
Tax: 331 participants 75% tax and 25% subsidy: 323 participants 50% tax and 50% subsidy: 325 participants 25% tax and 75% subsidy: 328 participants Subsidy: 334 participants
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials