Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending

Behavioral economics research has helped with understanding charitable behavior and has shown that charities can encourage donations by carefully designing their pledges. However, there is still scope to extend current research on who gives, what drives the decision to donate and at what levels, especially when behavioral insights are applied in context. In cooperation with a major Italian charity for cancer research, this study implements a natural direct mail field experiment, with over 150,000 letters sent to donors. By exploring the behavioral responses to different donation anchors, evidence was found that, within the given framework, including donation menus significantly increased the average amount donated without affecting the likelihood of donation. Furthermore, introducing additional explanations of how to make a payment significantly increased overall returns. Lastly, individual heterogeneity (high- and low-frequency donors, as well as senior and junior donors) had a direct effect on donations.

The field of behavioral economics enhances the ability of social science research to effectively inform socially efficient climate policy at the microeconomic level, in part due to the dependence of climate outcomes upon present and future human consumption patterns. Since the behavioral field is relatively new, environmental and resource economists still have scarce evidence as to why people make particular decisions. For this thesis, I have conducted both field and laboratory experiments to address market failures highly relevant to environmental outcomes, namely international public goods problems and externalities from fuel and resource consumption. My methodology capitalizes upon the benefits of each experimental methodology—laboratory, artefactual, framed, and natural—to capture the effects of particular informational and contextual elements on subsequent behavior. While each methodology has its potential advantages and shortcomings, I contend that the complete toolkit is necessary to study a broad range of relevant environmental contexts. For instance, while natural field experiments are generally considered the “gold standard” in terms of exogeneity and generalizability, many settings in which field experimentation may provide tremendous insight preclude randomization across unknowing subjects. Similarly, researchers may not have access to populations of interest, though lab experimentation may still provide insights into the behavior of these populations or reveal motivations not yet captured in neoclassical utility functions. In this thesis, I will detail results from one of each experimental type, each suited to the context of interest. The natural field experiment in Chapter 2 aims to discern whether there is a role for environmental preferences and cognitive dissonance to play in encouraging individuals to engage in resource-conserving behaviors, and suggests that the latter may be effective in changing the behavior of green consumers. Chapter 3 presents the results of a large-scale framed field experiment comprising all eligible captains in Virgin Atlantic Airways, which tested the impacts of personalized information, tailored targets, and prosocial incentives on captains’ performance of fuel-efficient behaviors. In addition to documenting a substantial Hawthorne effect, we provide intent-to-treat estimates of the three types of feedback to show that tailored targets are the most (cost) effective strategy of those implemented. I introduce a complementary artefactual field experiment in Chapter 4, which allows for detailed scrutiny of captains’ fuel efficiency based on their social preferences as well as preferences and attitudes toward risk and uncertainty. I find that more risk-averse captains are more prone to over-fuel, that prosocial incentives increase captains’ well-being, and that revealed altruism increases responsiveness to prosocial incentives. Finally, Chapter 5 aims to provide insight into the effects of “side deals” in facilitating cooperation on international climate agreements. Using a lab experiment, we find that side deals alter the composition of group contribution to climate change mitigation, eliciting increased effort on the part of players with higher wealth.

In his Perspective “ Homo experimentalis evolves” (11 July, p. [207][1]), J. A. List proudly acknowledges that economists perform experiments on human subjects without notifying them: “[I]n a natural field experiment, the analyst manipulates experimental conditions in a natural manner, whereby the experimental subjects are unaware that they are participating in an experiment. This approach combines the most attractive elements of the laboratory and of naturally occurring data: randomization and realism.” I know that psychologists tend to do the same thing. Yet this practice leads me to ask: Where has “informed consent” gone? ![Figure][2] Balancing act. Social scientists must walk a fine line in determining when a study's potential for public good justifies a relaxation of informed consent requirements. CREDIT: GETTY IMAGES # Response {#article-title-2} As my Perspective made clear, there are several types of field experiments. In some, subjects are made aware that they are taking part in an experiment and sign consent forms in the spirit of the guidelines of the Nuremberg code. There are, however, certain cases in which adhering to rigid ethical rules can affect the very issue that is being studied, such that it becomes quite difficult to conduct the research ([1][3], [2][4]). For example, if one were interested in exploring whether, and to what extent, race or gender influences the prices that buyers pay for used cars, it would be difficult to measure accurately the degree of discrimination among used car dealers who know that they are taking part in an experiment. For such purposes, it makes sense to consider executing a natural field experiment. This does not suggest that moral principles should be altogether abandoned in the pursuit of science. Quite the opposite: The researcher must weigh whether the research will inflict harm, gauge the extent to which the research benefits others, and determine whether experimental subjects chose the experimental environment of their own volition and are treated justly in the experiment. Local Research Ethics Committees and Institutional Review Boards in the United States serve an important role in monitoring such activities. Consider the natural field experiment that was discussed in my 11 July Perspective. In this experiment, a coauthor and I worked with a national fundraiser to explore various methods that fundraisers might wish to implement to be able to provide more of the public good. During the research, we never learned the solicitees' names, solicitees received letters similar to the ones they were sent in the normal course of their lives, and they made charitable donation decisions in a natural manner. In the end, we learned something interesting about the economics of charity while doing no harm to the solicitees. Indeed, some might argue that these potential donors were better off because our methods induced more giving and therefore a higher provision of the public good. When the research makes participants better off, benefits society, and confers anonymity and just treatment to all subjects, the lack of informed consent seems defensible. Ethical issues surrounding human experimentation are of utmost importance. Yet, the benefits and costs of informed consent should be carefully considered in each situation. Those cases in which there are minimal benefits of informed consent but large costs are prime candidates for relaxation of informed consent. 1. 1.[↵][5] 1. S. D. Levitt, 2. J. A. List , J. Econ. Persp. 21, 153 (2007). [OpenUrl][6][CrossRef][7][Web of Science][8] 2. 2.[↵][9] 1. R. Homan , The Ethics of Social Research (Longman, London, 1991). [1]: /lookup/doi/10.1126/science.1156716 [2]: pending:yes [3]: #ref-1 [4]: #ref-2 [5]: #xref-ref-1-1 View reference 1. in text [6]: {openurl}?query=rft.jtitle%253DJ.%2BEcon.%2BPersp.%26rft.volume%253D21%26rft.spage%253D153%26rft_id%253Dinfo%253Adoi%252F10.1257%252Fjep.21.2.153%26rft.genre%253Darticle%26rft_val_fmt%253Dinfo%253Aofi%252Ffmt%253Akev%253Amtx%253Ajournal%26ctx_ver%253DZ39.88-2004%26url_ver%253DZ39.88-2004%26url_ctx_fmt%253Dinfo%253Aofi%252Ffmt%253Akev%253Amtx%253Actx [7]: /lookup/external-ref?access_num=10.1257/jep.21.2.153&link_type=DOI [8]: /lookup/external-ref?access_num=000246989400008&link_type=ISI [9]: #xref-ref-2-1 View reference 2. in text

No Substitute for the Real Thing: The Importance of In-Context Field Experiments in Fundraising

Do information, price, or morals influence ethical consumption? A natural field experiment and customer survey on the purchase of Fair Trade coffee

Books Reviewed:Michael J. Boskin and Aaron Wildavsky, The Federal Budget: Economics and PoliticsJoan K. Martin, Urban Financial Stress: Why Cities Go BrokeJames T. Bennett and Manuel H. Johnson, Better Government at Half the Price: Private Production of Public ServicesE.S. Savas, Privatizing the Public SectorH. Edward Wesemann, Contracting for City ServicesPublic Securities Association, Fundamentals of Municipal BondsMorris Beck, Government Spending: Trends and IssuesRoger A. Freeman, The Wayward Welfare StateJames Mingle and Associates, Challenges of Retrenchment: Strategies for Consolidating Programs, Cutting Costs and Allocation ResourcesWilliam Spangar Peirce, Bureaucratic Failure and Public ExpenditureG. Bruce Doern, How Ottawa Spends Your Tax Dollars: National Policy and Economic Development—1982

We present evidence from a natural field experiment and structural model to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera, we mailed 25,000 opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to treatments designed to explore responses to fundraising schemes varying in: the presence of a lead donor; and how individual donations would be matched using the lead donation. The structural model estimates extensive and intensive margin responses, and is then utilized to predict giving behavior in counterfactual fundraising schemes. (JEL C93, D64, L31, L82)

The growing concentration of resources among the rich has re-ignited a discussion about whether the rich are more selfish than others. While many recent studies show the rich behaving less pro-socially, endogeneity and selection problems prevent safe inferences about differences in social preferences. We present new evidence from a natural field experiment in which we “misdeliver” envelopes to rich and poor households in a Dutch city, varying their contents to identify motives for returning them. Our raw data indicate the rich behave more pro-socially. Controlling for pressures associated with poverty and the marginal utility of money, however, we find no difference in social preferences. The primary distinction between rich and poor is simply that the rich have more money.

Voice‐based artificial intelligence (AI) systems have been recently deployed to replace traditional interactive voice response (IVR) systems in call center customer service. However, there is little evidence that sheds light on how the implementation of AI systems impacts customer behavior, as well as AI systems’ effects on call center customer service performance. By leveraging the proprietary data obtained from a natural field experiment in a large telecommunication company, we examine how the introduction of a voice‐based AI system affects call length, customers’ demand for human service, and customer complaints in call center customer service. We find that the implementation of the AI system temporarily increases the duration of machine service and customers’ demand for human service; however, it persistently reduces customer complaints. Furthermore, our results reveal interesting heterogeneity in the effectiveness of the voice‐based AI system. For relatively simple service requests, the AI system reduces customer complaints for both experienced and inexperienced customers. However, for complex requests, customers appear to learn from the prior experience of interacting with the AI system, which leads to fewer complaints. Moreover, the AI‐based system has a significantly larger effect on reducing customer complaints for older and female customers as well as for customers who have had extensive experience using the IVR system. Finally, we find that speech‐recognition failures in customer‐AI interactions lead to increases in customers’ demand for human service and customer complaints. The results from this study provide implications for the implementation of an AI system in call center operations.

Compensation and Rewards for Environmental Services (CRES) and efficient design of contracts in developing countries. Behavioral insights from a natural field experiment

Being in the right place: A natural field experiment on the causes of position effects in individual choice

The literature has shown the power of social norms to promote residential energy conservation, particularly among high usage users. This study uses a natural field experiment with nearly 200,000 US households to explore whether a financial rewards program can complement such approaches. We observe strong impacts of the program, particularly amongst low-usage and low-variance households, customers who typically are less responsive to normative messaging. Our data thus suggest important policy complementarities between behavioral and financial incentives: whereas non-pecuniary interventions disproportionately affect intense users, financial incentives are able to substantially affect the low-user, “sticky households.”

Do effects of theoretical training and rewards for energy-efficient behavior persist over time and interact? A natural field experiment on eco-driving in a company fleet

Matched Fundraising: Evidence from a Natural Field Experiment

Are experimental economists prone to framing effects? A natural field experiment