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Promoting discount schemes as a nudge strategy to enhance environmental behaviour

Julie Metta

No 2020.11, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: This paper presents the effects of nudging and of direct instruments on the consumer choice for reusable cups instead of disposable cups. The instruments include a financial incentive (discount schemes for consumers bringing their own cup) and communication about the scheme. The required conditions for the shop policy to be effective (i.e. induce a change in consumer behaviour through direct and indirect communication) are also evaluated. An original database was compiled from structured observations over 223 Hong Kong coffee shops, where 522 data points were collected. The research questions are answered using two strategies. First, logistic econometric approaches estimate the effects of the policies on consumer behaviour. Secondly, a qualitative comparative analysis identifies the required conditions for the consumers to use reusable cups. The results show no significant effect of the financial incentive on the targeted consumers but positive and significant effects on the other consumers who switch to in-shop reusable cups instead of disposable cups. Through effective communication about the "environment-friendly" shop policy, coffee shops affect the consumer behaviour towards reusable cups positively. I observe that nudges have higher effects than financial instruments on consumer behavioural change even when the settings account for strong conservative behaviours. The analysis of coffee shop typologies reports that coffee shops targeting a wealthier audience are more likely to achieve policy goals through nudge strategy.

Keywords: Hong Kong; consumer behaviour; financial incentive; discrete choice model; qualitative comparative analysis (search for similar items in EconPapers)
JEL-codes: C99 D83 D89 Q56 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2020-05
New Economics Papers: this item is included in nep-dcm
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http://faere.fr/pub/WorkingPapers/Metta_FAERE_WP2020.11.pdf First version, 2020 (application/pdf)

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