%0 Report
        %A Rodemeier, Matthias
%A Löschel, Andreas
        %T Information Nudges, Subsidies, and Crowding Out of Attention: Field Evidence from Energy Efficiency Investments
        %D 2023
        %8 2023 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 16141
        %U https://www.iza.org/publications/dp16141
        %X How can information substitute or complement financial incentives such as Pigouvian subsidies? We answer this question in a large-scale field experiment that cross-randomizes energy efficiency subsidies with information about the financial savings of LED lighting. Information has two effects: It shifts and rotates demand curves. The direction of the shift is ambiguous and highly dependent on the information design. Informing consumers that an LED saves 90% in annual energy costs increases LED demand, but showing them that 90% corresponds to an average of 11 euros raises demand for less efficient technologies. The rotation of the demand curve is unambiguous: 
information dramatically reduces both own-price and cross-price elasticities, which makes subsidies less effective. The uniform decrease in price elasticities suggests that consumers pay less attention to subsidies when information is provided. We structurally estimate that welfare-maximizing subsidies are up to 150% larger than the Pigouvian benchmark when combined with information.
        %K energy efficiency
%K field experiments
%K internality taxes
%K optimal taxation
%K nudges
%K information
%K behavioral public economics