The effectiveness of behavioural interventions on increasing revenue from local fee

Abstract

Purpose

The objective was to increase earnings of the city of Prievidza from waste disposal fee by proactive communication – reminder (a letter) and leaflets with targeted framing. The quasi-experiment aims to find out which type of leaflet framing (an injunctive social norm or public good) causes the most effective change in the debtors' behaviour.

Design/methodology/approach

The article presents the results of a behavioural quasi-experiment, carried out on a local government level. The effectiveness of the intervention was tested in a quasi-experiment with the sample size 712, which is 35% of all waste disposal fee debtors in Prievidza.

Findings

The intervention that has proven to be the most effective was a reminder together with an injunctive social norm leaflet. It resulted in a 1.7 times higher probability for the debt to be paid. The results also indicate that a reminder is significantly more effective if targeted at debtors who only owe one payment–this group was three times more likely to pay their debt after being exposed to the intervention.

Practical implications

Public policy recommendation is to primarily target the group of debtors who owe one payment.

Originality/value

Another testing and replication of this experiment design is highly important. Nonetheless, the first testing (field quasi-experiment) shows the potential of using the notification as well as social norm framing. It also appears that self-governments should use notifications to primarily address debtors without a long history of non-payment.

Citation

Sloboda, M., Pavlovský, P. and Sičáková-Beblavá, E. (2022), "The effectiveness of behavioural interventions on increasing revenue from local fee", Review of Behavioral Finance, Vol. 14 No. 1, pp. 1-15. https://doi.org/10.1108/RBF-06-2020-0126