The Long-Term Impact of Matching and Rebate Subsidies When Public Goods are Impure: Field Experimental Evidence from the Carbon Offsetting Market

39 Pages Posted: 4 Dec 2014 Last revised: 12 Dec 2014

See all articles by Martin Kesternich

Martin Kesternich

ZEW – Leibniz Centre for European Economic Research

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Daniel Römer

ZEW – Leibniz Centre for European Economic Research; Heidelberg University - Alfred Weber Institute for Economics

Date Written: November 1, 2014

Abstract

In this paper, we investigate both short- and long-term impacts of financial stimuli on public goods provision when contributions are tied to individual harm-related behavior. We conduct a large-scaled field experiment to examine voluntary contributions to a carbon offsetting program during the online purchase of a bus ticket. We systematically vary the individual payoff structure by introducing different matching grants (1/3:1, 1:1, 3:1) and price rebates (r-25%, r-50%, r-75%). Our results show that price rebates are more effective than matching schemes in raising participation rates while matching grants induce higher contributions to the offsetting program. We suspect differences in the personal responsibility for the compensated emissions to drive this result. Analyzing repeated bookings, we find decreasing treatment effects for returning customers except for the case of 1:1 matching grants. The equal matching scheme is also the only intervention that increases net contributions of customers compared to the control group.

Keywords: voluntary carbon offsets, randomized field experiment, public goods, rebate subsidy, matching subsidy

JEL Classification: H41, C93, D03, L92

Suggested Citation

Kesternich, Martin and Löschel, Andreas and Römer, Daniel and Römer, Daniel, The Long-Term Impact of Matching and Rebate Subsidies When Public Goods are Impure: Field Experimental Evidence from the Carbon Offsetting Market (November 1, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-098, Available at SSRN: https://ssrn.com/abstract=2533444 or http://dx.doi.org/10.2139/ssrn.2533444

Martin Kesternich (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

Daniel Römer

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Heidelberg University - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 20
Heidelberg, D-69115
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
35
Abstract Views
572
PlumX Metrics