A nice point

By Paul Walker 05/09/2012

[Originally published 20 August]

At the Homepaddock blog Ele Ludemann makes a nice point about the difference between what people say they want and what they are willing to pay for:

A survey established that New Zealanders support incentives to encourage clean industries and technologies.

The survey, of 2829 New Zealanders aged 18-plus, taken between July 5 and 16, 2012, asked recipients about their attitude toward incentives to encourage technologies such as marine energy and fuel-efficient cars,Carbon News reports.

All received strong support – with home insulation topping the list with nearly 100% backing.

The results showed that:

• 98.8 per cent support further subsidies to insulate un-insulated homes (1.3 per cent oppose).

• 78.4 per cent support incentives to develop biofuel from waste wood (2.8 per cent oppose).

• 74.5 per cent of respondents support reducing the annual registration fee for vehicles with smaller engines (6.7 per cent opposed).

• 72.3 per cent support incentives to develop wave and tidal power (9.1 per cent oppose).

• 64.7 per cent support cash incentives to buy fuel-efficient and lower-emissions cars (8.2 per cent oppose).

• 57.9 per cent support investing in alternative fuel technologies, such as those that capture and store emissions from coal-fired power stations (92 per cent oppose).

• 49.8 per cent support requiring standards on imported vehicles’ fuel efficiency to lift national fleet performance overall (10.7 per cent opposed).

The survey didn’t say if it asked respondents if they would be happy to pay for these incentives, nor if they were already doing what they could to support clean industries and technologies.

The last point above is a good one. The important thing to get people to reveal is what they are actually willing to pay for something. Just saying you favour X isn’t the same as paying for X. Most people are more willing to do the former than the latter.

This is one reason why economists aren’t too keen on survey data, what you really want is data on what people really do. Putting your money where your mouth is, is very different from just putting words where your mouth is. Or, talk is cheap.

How many of those answering the survey are will to pay more in tax to pay for the subsidies and incentive they say they favour? Are these same people willing to pay more for a used car because of the fuel efficiency requirement they support? And how much more?