Enabling Eco-Friendly Choices by Relying on the Proportional-Thinking Heuristic

Abstract: Ecological (eco) taxes are promising mechanisms to enable eco-friendly decisions, but few people prefer them. In this study, we present a way in which eco-tax options may be communicated to general public to encourage their payment. Our implementation (called “information presentation”) takes advantage of the non-linear relationship between eco-tax payments and CO₂ emissions and the human reliance on the proportional-thinking heuristic. According to the proportional-thinking heuristic, people are likely to prefer a small eco-tax increase and judge larger eco-tax increases to cause proportionally greater CO₂ emissions reductions. In an online study, participants were asked to choose between eco-tax increases in two problems: In one, a smaller eco-tax increase resulted in greater CO₂ emissions reduction, while in the other, a smaller tax increase resulted in lesser CO₂ emissions reduction. Although the larger eco-tax increase did not reduce CO₂ emissions the most, across both problems, people judged larger eco-tax increases to cause proportionally greater reductions in CO₂ emissions and preferred smaller tax increases. Thus, eco-tax policies would benefit by presenting information in terms of eco-tax increases, such that smaller eco-tax increases (which are more attractive and are likely to be chosen by people) cause greater CO₂ emissions reductions.