On the Acceptability of the Ambient Tax Mechanism: An Experimental Investigation

20 Pages Posted: 13 Nov 2007

See all articles by Kene Boun My

Kene Boun My

University of Strasbourg - Bureau of Economic Theory and Application (BETA); University of Strasbourg

François Cochard

Université Louis Pasteur Strasbourg I

Anthony Ziegelmeyer

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; Queen's University Belfast - Queen's Management School

Multiple version iconThere are 2 versions of this paper

Date Written: November 12, 2007

Abstract

Our objective in this paper is to assess the acceptability of the ambient tax. Concretely, we ask subjects to choose between (A) an ambient tax and (B) an individual tax system. In case (A), they actually participate in a game in which their payoff depends on all participants' decisions and on natural variability as would be the case in the real world if an ambient tax was implemented. In case (B) they simply earn a sure payoff, which is supposed to reflect their maximal profit under the individual tax system. We take the percentage of agents preferring the ambient tax to a given sure payoff level as an indicator of the acceptability of the ambient tax given this sure payoff level. Our experimental results mitigate the common belief that ambient taxes are totally unacceptable. If the sure alternative to the ambient tax policy is very costly for the polluters, for example because it involves high inspection costs, polluters might eventually prefer being liable to an ambient tax.

Keywords: Nonpoint Source Pollution, Group Decision Making, Experiments, Acceptability of fiscal instruments

JEL Classification: C92, H3, Q5

Suggested Citation

Boun My, Kene and Cochard, François and Ziegelmeyer, Anthony, On the Acceptability of the Ambient Tax Mechanism: An Experimental Investigation (November 12, 2007). Jena Economic Research Paper No. 2007-081, Available at SSRN: https://ssrn.com/abstract=1029620 or http://dx.doi.org/10.2139/ssrn.1029620

Kene Boun My (Contact Author)

University of Strasbourg - Bureau of Economic Theory and Application (BETA) ( email )

France

University of Strasbourg ( email )

61, avenue de la foret noire
4, rue Blaise Pascal
Strasbourg, Alsace 3000
France

François Cochard

Université Louis Pasteur Strasbourg I

61, avenue de la foret noire
4, rue Blaise Pascal
Strasbourg, Alsace 3000
France

Anthony Ziegelmeyer

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

Queen's University Belfast - Queen's Management School ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

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