[Seminaire CREM] Unpacking the Side Effects of Behavioural Policies - Faculté Des Sciences Economiques

Abstract:
Several studies show that behavioural policies can alter non-targeted decisions. Still unknown is whether such spillovers are caused by merely making the targeted decision or if they are a pure by-product of policies. Each channel has different policy implications. We model the mechanisms underpinning both channels and provide experimental evidence for their existence. Surveying 5557 English respondents, we test if a social norm message promoting vegetarianism alters a non-targeted action: environmental donations. We find three core results. First, social norm messaging effectively increases vegetarian choices, but not uniformly. A subgroup, identified with machine learning, drives this effect. Second, using an instrumental variable, we find that choosing vegetarian food increases donations, providing evidence for the behavioural channel. Third, the nudge reduces donations for the subgroup identified with machine learning, providing evidence for the policy channel. Our results suggest social norm messaging works at the risk of crowding out intrinsic motivations.