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Spillovers from targeting of incentives: Exploring responses to being excluded

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  • Alpízar, Francisco
  • Nordén, Anna
  • Pfaff, Alexander
  • Robalino, Juan

Abstract

A growing set of policies involve transfers conditioned upon socially desired actions, such as attending school or conserving forest. However, given a desire to maximize the impact of limited funds by avoiding transfers that do not change behavior, typically some potential recipients are excluded on the basis of their characteristics, their actions or at random. This paper uses a laboratory experiment to study the behavior of individuals excluded on different bases from a new incentive that encourages real monetary donations to a public environmental conservation program. We show that the donations from the individuals who were excluded based on prior high contributions fell significantly. Yet the rationale used for exclusion mattered, in that none of the other selection criteria used as the basis for exclusion resulted in negative effects on contributions.

Suggested Citation

  • Alpízar, Francisco & Nordén, Anna & Pfaff, Alexander & Robalino, Juan, 2017. "Spillovers from targeting of incentives: Exploring responses to being excluded," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 87-98.
    • Handle: RePEc:eee:joepsy:v:59:y:2017:i:c:p:87-98
    DOI: 10.1016/j.joep.2017.02.007
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    3. Goytom Abraha Kahsay & Workineh Asmare Kassie & Abebe Damte Beyene & Lars Gårn Hansen, 2017. "Do public works programs crowd-out pro-environmental behavior? Empirical evidence from food-for-work programs in Ethiopia," IFRO Working Paper 2017/13, University of Copenhagen, Department of Food and Resource Economics.
    4. Blanco, Esther & Haller, Tobias & Walker, James M., 2018. "Provision of environmental public goods: Unconditional and conditional donations from outsiders," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 815-831.
    5. van Soest,Daan & Adjognon,Guigonan Serge & van der Heijden,Eline, 2021. "Incentivizing Conservation of de facto Community-Owned Forests," Policy Research Working Paper Series 9693, The World Bank.
    6. Robalino, Juan & Pfaff, Alexander & Sandoval, Catalina & Sanchez-Azofeifa, G. Arturo, 2021. "Can we increase the impacts from payments for ecosystem services? Impact rose over time in Costa Rica, yet spatial variation indicates more potential," Forest Policy and Economics, Elsevier, vol. 132(C).
    7. Jones, Kelly W. & Mayer, Alex & Von Thaden, Juan & Berry, Z. Carter & López-Ramírez, Sergio & Salcone, Jacob & Manson, Robert H. & Asbjornsen, Heidi, 2020. "Measuring the net benefits of payments for hydrological services programs in Mexico," Ecological Economics, Elsevier, vol. 175(C).
    8. Blanco, Esther & Moros, Lina & Pfaff, Alexander & Steimanis, Ivo & Velez, Maria Alejandra & Vollan, Björn, 2023. "No crowding out among those terminated from an ongoing PES program in Colombia," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).

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    More about this item

    Keywords

    Monetary incentives; Targeting; Spillovers; Economic experiments; Behavioral economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H4 - Public Economics - - Publicly Provided Goods

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