Research

We examine the impact of a carbon tax on consumer choices via a large-scale online randomized controlled trial. Higher taxes generally reduce the demand for high-carbon goods. Compared to an import tax, a carbon tax reduces demand when the tax is zero (i.e., announced but not levied) but shows relatively higher demand for high-carbon goods when a positive tax is introduced. This contradiction of basic price theory is entirely driven by climate-concerned consumers. Our findings suggest that carbon taxes can crowd out climate concerns, leading to important implications for policy.

Working Paper

I study consumer inertia in the Danish retail electricity market, where switching can
yield substantial savings and frictions are low. Using administrative smart-meter data
for 200,000 randomly-sampled households, a survey of 9,047 nationally-representative
consumers, and a randomized experiment, I test whether attention and reduced switching
costs increase switching. Targeted savings information and brokerage services raise
switching by 0.8–1.3 percentage points over three months, despite average potential
savings of $140–$360. Behavioral frictions—especially procrastination and distrust—drive
a large gap between switching intentions and actions, suggesting that overcoming inertia
may require active policies such as default enrollment into lower-cost contracts.

Working paper

R&R at Economic Journal

Peer evaluation tournaments are common in academia, the arts, and corporate environments. They make use of the expert knowledge that academics or team members have in assessing their peers’ performance. However, rampant opportunities for cheating may throw a wrench in the process, unless, somehow, players have a preference for honest reporting. Building on Dufwenberg & Dufwenberg (2018)’s  theory of perceived cheating aversion, we develop a multi-player model where players balance the utility of winning against the disutility of being identified as a cheater. We derive a set of predictions, and test these in a controlled laboratory experiment.

Working paper

Reminders can successfully change behavior, but have also been shown to create annoyance costs. In a field experiment with over 4000 pregnant women in South Africa, we test whether exposing women to reminders to take their prenatal supplements affects their demand for reminders through a digital health platform. We document a strong baseline demand for reminders, which increases further after exposure, despite high stated adherence. We find that pure reminders and reminders with moral suasion both increase willingness to pay for additional reminders and increase adherence, while informational reminders decrease willingness to pay and adherence.

Working paper

R&R at JESA

The effectiveness of many health recommendations and treatment plans depends on the extent to which individuals follow them. For the individual, medication adherence involves an inter-temporal trade-off between expected future health benefits and immediate effort costs. Therefore examining time-preferences may help us to understand why some people fail to follow health recommendations and treatment plans. In this paper, we use a simple, unobtrusive real-effort task implemented via text message to elicit the time preferences of pregnant women in South Africa. We find evidence that both our measured discount factor and time-inconsistency are predictive of self-reported adherence to the recommendation of taking iron supplements daily during pregnancy.  This suggests that patience plays a role in determining medication adherence patterns.

Working paper

If experimental subjects arbitrage against market interest rates when making intertemporal allocations of cash, the data will reveal nothing about subjects’ discounting, only uncovering subjects’ market interest rates. If subjects instead frame choices narrowly, they will plan to spend cash rewards when received, implying cash has properties similar primary rewards. We test arbitrage directly by forcing all transactions with subjects to go exclusively through their financial institutions via instant electronic transfers. If subjects wish to arbitrage, this should make it as easy and salient as possible. Our evidence contradicts arbitrage, and finds evidence of present bias, supporting the view that money payments in experiments can be treated as a primary reward.

Working paper