Session 2A: Do people prefer mandates to taxes and why?
Session Number
Session 2A: 3rd Presentation
Advisor(s)
Tatyana Deryugina, University of Illinois at Urbana-Champaign
Location
Room A147
Start Date
28-4-2017 10:00 AM
End Date
28-4-2017 11:15 AM
Abstract
There are several policy options that can reduce pollution and other externalities associated with economic activity. They can be classified into two categories: mandates, such as minimum fuel efficiency or pollution emission standards, and price-based instruments, such as gasoline taxes or tradable pollution permits. Although economic theory predicts that price-based instruments are more efficient (cheaper for a given unit of pollution reduction) than mandates, price-based instruments are empirically much rarer than mandates. We examined whether individuals prefer fuel efficiency standards (a mandate) over a gasoline tax (a price-based instrument) for the purposes of reducing gasoline usage. We find that respondents strongly prefer fuel efficiency standards and that this preference is fairly stable across many demographic groups.
Session 2A: Do people prefer mandates to taxes and why?
Room A147
There are several policy options that can reduce pollution and other externalities associated with economic activity. They can be classified into two categories: mandates, such as minimum fuel efficiency or pollution emission standards, and price-based instruments, such as gasoline taxes or tradable pollution permits. Although economic theory predicts that price-based instruments are more efficient (cheaper for a given unit of pollution reduction) than mandates, price-based instruments are empirically much rarer than mandates. We examined whether individuals prefer fuel efficiency standards (a mandate) over a gasoline tax (a price-based instrument) for the purposes of reducing gasoline usage. We find that respondents strongly prefer fuel efficiency standards and that this preference is fairly stable across many demographic groups.