Forthcoming, Journal of Policy Analysis and Management
23 Pages Posted: 1 Mar 2015
Date Written: February 27, 2015
This paper offers a framework for regulating internalities. Using a simple economic model, we provide four principles for designing and evaluating behaviorally-motivated policy. We then outline rules for determining which contexts reliably reflect true preferences and discuss empirical strategies for measuring internalities. As a case study, we focus on energy efficiency policy, including Corporate Average Fuel Economy (CAFE) standards and appliance and lighting energy efficiency standards.
Keywords: Internalities, behavioral economics, fuel economy, energy efficiency
JEL Classification: D03, D10, D18, D61, D83, H21, K00, K20, L51, L94, Q48
Suggested Citation: Suggested Citation