Yellow Vests, Carbon Tax Aversion, and Biased Beliefs

Thomas Douenne () and Adrien Fabre

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Abstract: This paper helps to understand how beliefs form and determine attitudes towards policies. Using a new survey and official households' survey data, we investigate the case of carbon taxation in France in the context of the Yellow Vests movement that started against it. We find that French people would largely reject a Tax & Dividend policy, i.e. a carbon tax whose revenues are redistributed uniformly to each adult. However, they also overestimate the negative impact of the scheme on their purchasing power, wrongly think it is regressive, and do not perceive it as environmentally effective. Using information about the scheme as instruments to robustly identify causal effects, our econometric analysis shows that if we could rectify these three biased beliefs, it would suffice to generate majority approval. Yet, only a small minority can be convinced by new information and revisions are biased towards pessimism. Finally, if overly pessimistic beliefs cause tax rejection, they also result from it through motivated reasoning, which manifests what we define as "tax aversion".

Keywords: Climate Policy; Carbon tax; Bias; Beliefs; Preferences; Tax aversion (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02482639v1
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Citations: View citations in EconPapers (6)

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Working Paper: Yellow Vests, Carbon Tax Aversion, and Biased Beliefs (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:psewpa:halshs-02482639

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