Nudges versus Prices: Comparing the Effectiveness of Behavioural
Interventions and Carbon Taxation in Reducing Household Ecological
Footprints

Chaarvi Parasher

doi:10.46609/IJSSER.2026.v11i07.015

Title: Nudges versus Prices: Comparing the Effectiveness of Behavioural Interventions and Carbon Taxation in Reducing Household Ecological Footprints
Authors: Chaarvi Parasher
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 11 Issue: 7 Publication Date: July 2026 DOI: 10.46609/IJSSER.2026.v11i07.015
\|\| \|\|
Chaarvi Parasher DPS International
MLA 8 Parasher, Chaarvi. "Nudges versus Prices: Comparing the Effectiveness of Behavioural Interventions and Carbon Taxation in Reducing Household Ecological Footprints." Int. j. of Social Science and Economic Research, vol. 11, no. 7, July 2026, pp. 3073-3086, doi.org/10.46609/IJSSER.2026.v11i07.015. Accessed July 2026. APA 6 Parasher, C. (2026, July). Nudges versus Prices: Comparing the Effectiveness of Behavioural Interventions and Carbon Taxation in Reducing Household Ecological Footprints. Int. j. of Social Science and Economic Research, 11(7), 3073-3086. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i07.015 Chicago Parasher, Chaarvi. "Nudges versus Prices: Comparing the Effectiveness of Behavioural Interventions and Carbon Taxation in Reducing Household Ecological Footprints." Int. j. of Social Science and Economic Research 11, no. 7 (July 2026), 3073-3086. Accessed July, 2026. https://doi.org/10.46609/IJSSER.2026.v11i07.015.
References [1] . Allcott, H. (2011). Social norms and energy conservation. Journal of Public Economics, 95(9-10), 1082-1095. https://doi.org/10.1016/j.jpubeco.2011.03.003 [2] . Allcott, H., & Rogers, T. (2014). The short-run and long-run effects of behavioral interventions: Experimental evidence from energy conservation. American Economic Review, 104(10), 3003-3037. https://doi.org/10.1257/aer.104.10.3003 [3] . Andersson, J. J. (2019). Carbon taxes and CO2 emissions: Sweden as a case study. American Economic Journal: Economic Policy, 11(4), 1-30. https://doi.org/10.1257/pol.20170144 [4] . Andor, M. A., & Fels, K. M. (2018). Behavioral economics and energy conservation: A systematic review of non-price interventions and their causal effects. Ecological Economics, 148, 178-210. https://doi.org/10.1016/j.ecolecon.2018.01.018 [5] . Beyer, B., Hoffmann, S., & Schaltegger, S. (2024). How does carbon footprint information affect consumer choice? A field experiment. Journal of Accounting Research, 62, 101-136. https://doi.org/10.1111/1475-679X.12505 [6] . Carattini, S., Carvalho, M., & Fankhauser, S. (2018). Overcoming public resistance to carbon taxes. WIREs Climate Change, 9(5), e531. https://doi.org/10.1002/wcc.531 [7] . Cialdini, R. B., Reno, R. R., & Kallgren, C. A. (1990). A focus theory of normative conduct: Recycling the concept of norms to reduce littering in public places. Journal of Personality and Social Psychology, 58(6), 1015-1026. https://doi.org/10.1037/0022-3514.58.6.1015 [8] . DellaVigna, S., & Linos, E. (2022). RCTs to scale: Comprehensive evidence from two nudge units. Econometrica, 90(1), 81-116. https://doi.org/10.3982/ECTA18709 [9] . Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263-291. https://doi.org/10.2307/1914185 [10] . Labandeira, X., Labeaga, J. M., & López-Otero, X. (2017). A meta-analysis on the price elasticity of energy demand. Energy Policy, 102, 549-568. https://doi.org/10.1016/j.enpol.2017.01.002 [11] . Maier, M., Bartos, F., Stanley, T. D., Shanks, D. R., Harris, A. J. L., & Wagenmakers, E.-J. (2022). No reason to expect large and consistent effects of nudge interventions. Proceedings of the National Academy of Sciences, 119(19), e2200732119. https://doi.org/10.1073/pnas.2200732119 [12] . Mertens, S., Herberz, M., Hahnel, U. J. J., & Brosch, T. (2022). The effectiveness of nudging: A meta-analysis of choice architecture interventions across behavioral domains. Proceedings of the National Academy of Sciences, 119(1), e2107346118. https://doi.org/10.1073/pnas.2107346118 [13] . Rivers, N., & Schaufele, B. (2015). Salience of carbon taxes in the gasoline market. Journal of Environmental Economics and Management, 74, 23-36. https://doi.org/10.1016/j.jeem.2015.07.002 [14] . Sunstein, C. R. (2014). Nudging: A very short guide. Journal of Consumer Policy, 37(4), 583-588. https://doi.org/10.1007/s10603-014-9273-1 [15] . Thaler, R. H. (2016). Behavioral economics: Past, present, and future. American Economic Review, 106(7), 1577-1600. https://doi.org/10.1257/aer.106.7.1577 [16] . Yu, Y. (2023). Carbon taxes and CO2 emissions: A replication of Andersson (American Economic Journal: Economic Policy, 2019). Working Papers in Economics 23/09, University of Canterbury, Department of Economics and Finance.
ABSTRACT: Household energy use and consumption choices are a major source of greenhouse gas emissions, yet standard economic theory assumes that a price signal, such as a carbon tax, is sufficient to correct this externality by making households internalise the social cost of their emissions. Behavioural economics complicates this picture. Bounded rationality, referencedependent choice, and social-norm effects suggest that households often respond to information, framing, and social comparison in ways that a purely price-based model does not predict. This paper compares two household-facing climate policy instruments: behavioural nudges, such as social comparison home energy reports and carbon-footprint labelling, and price-based carbon taxation. Drawing on field experiments, a systematic review, and several meta-analyses published between 1979 and 2024, the review finds that both instruments can reduce household emissions, but that nudges typically produce smaller percentage reductions than headline academic estimates once measured at government scale, while carbon taxes generate more durable, price-linked behaviour change, at greater political cost. Notably, evidence on carbontax salience suggests that even price-based instruments partly work through the same behavioural channels that nudges exploit deliberately. The paper concludes that behavioural and price-based tools are best understood as complements rather than substitutes, and that design details, not instrument choice alone, determine real-world effectiveness.

IJSSER is Member of