Monday, February 7, 2022

After the Yellow Vests movement, the French people would largely reject a tax and dividend policy (a carbon tax whose revenues are redistributed uniformly to each adult): overestimate their net monetary losses, wrongly think that the policy is regressive

Yellow Vests, Pessimistic Beliefs, and Carbon Tax Aversion. Thomas Douenne and Adrien Fabre. American Economic Journal: Economic Policy. Feb 2022, Vol. 14, No. 1: Pages 81-110. https://pubs.aeaweb.org/doi/pdfplus/10.1257/pol.20200092

Abstract: Using a representative survey, we find that after the Yellow Vests movement, French people would largely reject a tax and dividend policy, i.e., a carbon tax whose revenues are redistributed uniformly to each adult. They overestimate their net monetary losses, wrongly think that the policy is regressive, and do not perceive it as environmentally effective. We show that changing people’s beliefs can substantially increase support. Although significant, the effects of our informational treatments on beliefs are small. Indeed, the respondents that oppose the tax tend to discard positive information about it, which is consistent with distrust, uncertainty, or motivated reasoning. (JEL D83, H23, H31, Q54, Q58)



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