The impact of policy awareness: Evidence from vehicle choices response to fiscal incentives

Davide Cerruti (), Claudio Daminato and Massimo Filippini

Journal of Public Economics, 2023, vol. 226, issue C

Abstract: Isolating the role of limited knowledge, psychological frictions and policy characteristics is key when evaluating a public program and designing future policies. We document limited awareness about the presence of fiscal incentives towards fuel efficient vehicles. Exploiting a direct measure of awareness at the individual level, we find vehicle choices response heterogeneity to these fiscal incentives between aware and unaware individuals. To estimate the effect of awareness, we leverage a field experiment randomizing information about the mere existence of the fiscal incentives. We show the simple intervention substantially increases policy awareness among vehicle buyers and affects consumers’ vehicle choices. Further, we find increased awareness induces consumers to purchase vehicles that consume less fuel. Together, our findings highlight that limited awareness represents a critical barrier to the effectiveness of public programs.

Keywords: Policy awareness; Fiscal programs; Environmental taxation; Vehicle choices (search for similar items in EconPapers)
JEL-codes: D12 D83 H23 H31 Q48 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: The Impact of Policy Awareness: Evidence from Vehicle Choices Response to Fiscal Incentives (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:226:y:2023:i:c:s004727272300155x

DOI: 10.1016/j.jpubeco.2023.104973

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