On the 22nd of November, Francisco Alpizar will present his research during the EEU seminar. Francisco is the Chair and Professor of the Environmental and Natural Resource Economics Group at the Department of Social Sciences in Wageningen University and Research. You can find out more about Francisco's research on his website.
Francisco will present us a paper with the topic Exposure-enhanced goods and technology disadoption. The abstract is below, and you can find the paper here.
Abstract
Policymakers often subsidize goods that generate positive externalities, only to see these goods disadopted. We posit that disadoption can be mitigated by incentivizing longer exposure, which reduces disadoption via three mechanisms: information, taste, and ability. We develop a theoretical model that incorporates these mechanisms and demonstrate how it relates to the literatures on experience goods, habit formation, and learning-by-doing. We provide empirical evidence for the model’s predictions using a field experiment in which a household’s period of exposure to water-efficient technologies was exogenously manipulated via a financial incentive. Using our theoretical model, we then develop intuition about the optimal time distribution of subsidies. We show that, under common features of policy contexts, limited-duration exposure subsidies can be better than subsidies offered at the point of purchase or in perpetuity conditional on use. Our paper thus highlights conditions under which policymakers can use short-term incentives to induce long-term behavioral change.