Lubomir Cingl (University of Economics Prague) is presenting at the VCEE Seminar

Lubomir Cingl talks about "Carrots or Sticks? Field Evidence on What Makes People Pay TV Fees" on 24 April 2020 at 11.20am.


In a large natural field experiment (N=82,645) we evaluate new strategies on how to increase compliance of potential TV fees evaders by sending them letters and randomly varying the text and envelope. We use two new text strategies aimed at(i) the elicitation of preference for fee designation, and (ii) the explanation of fee purpose. We also employ three well-known strategies that have so far given conflicting results in the literature: (iii) highlighting the formal consequences of evasion, (iv) stating the value of services obtained in exchange for the fee, and (v) invoking social norms. We also test two modifications of the envelope design and aim at recipients' reciprocity and attention stimulation by (vi) placing a picture of a fairy-tale cartoon character on the envelope and an identical sticker inside, or by (vii) placing there a red inscription ``Important'' instead. Our results show that the only treatment more efficient than the baseline is using the deterrence principle spelling out the formal consequences of not paying. Both envelope-modifying treatments marginally decrease the response and registration rates. In a preceding incentivized laboratory pre-test, students had predicted the ranking of the text treatments accurately.