Enabling Eco-Friendly Choices by Relying on the Proportional-Thinking Heuristic

Varun Dutt and Cleotilde Gonzalez
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Varun Dutt: School of Computing and Electrical Engineering, School of Humanities and Social Sciences, Indian Institute of Technology, Mandi, 175001, India
Cleotilde Gonzalez: Dynamic Decision Making Laboratory, Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA 15289, USA

Sustainability, 2013, vol. 5, issue 1, 1-15

Abstract: Ecological (eco) taxes are promising mechanisms to enable eco-friendly decisions, but few people prefer them. In this study, we present a way in which eco-tax options may be communicated to general public to encourage their payment. Our implementation (called “information presentation”) takes advantage of the non-linear relationship between eco-tax payments and CO 2 emissions and the human reliance on the proportional-thinking heuristic. According to the proportional-thinking heuristic, people are likely to prefer a small eco-tax increase and judge larger eco-tax increases to cause proportionally greater CO 2 emissions reductions. In an online study, participants were asked to choose between eco-tax increases in two problems: In one, a smaller eco-tax increase resulted in greater CO 2 emissions reduction, while in the other, a smaller tax increase resulted in lesser CO 2 emissions reduction. Although the larger eco-tax increase did not reduce CO 2 emissions the most, across both problems, people judged larger eco-tax increases to cause proportionally greater reductions in CO 2 emissions and preferred smaller tax increases. Thus, eco-tax policies would benefit by presenting information in terms of eco-tax increases, such that smaller eco-tax increases (which are more attractive and are likely to be chosen by people) cause greater CO 2 emissions reductions.

Keywords: proportional thinking; eco-tax; climate change; carbon-dioxide emissions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2013
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