Policymakers often subsidize and distribute goods that generate positive externalities, only to see these goods subsequently disadopted. We posit that disadoption of these pro-social goods can be reduced when longer exposure enhances the perceived net benefits of using the goods. We articulate a unified theoretical model for understanding exposure-enhancing mechanisms — information, taste, and ability — and test for their presence in a randomized controlled field experiment. In the experiment, four months of incentivized exposure increased the likelihood that a household was still using low-flow water fixtures one year after subsidies were no longer offered. Longer exposure provided households with better information on water bill savings and increased households’ taste for the fixtures. We see no evidence that exposure improved the ability of households to maintain the fixtures. We use the model to develop intuition about the optimal time distribution of subsidies and show that short-term exposure subsidies for pro-social goods can outperform purchase subsidies and use subsidies.
This will be a joint seminar with Tilburg University. The webinar link will follow through email. Also note that the seminar is planned to be 15 minutes longer.