Conference Agenda

The recent surge in European energy prices led governments to implement compensation schemes, mostly untargeted price subsidies that disproportionately benefited high-consumption and, on average, high-income households. While lump-sum transfers would maintain energy-saving incentives and could be perceived as fairer, public awareness of the efficiency and distribution of compensation schemes remains limited. We experimentally assess how information about compensation distribution and electricity-saving incentives affects public support for price subsidies and lump-sum transfers. While initial support for price subsidies is very high, informing participants about distributional effects significantly reduces this support and increases preference for lump-sum transfers. In contrast, information on electricity-saving incentives has no overall effect, likely because it has a weaker impact on households that benefit the most from a price subsidy. Our findings suggest that correcting misperceptions about subsidy distribution drives these shifts in support. Although providing information shifts support in favor of the lump-sum scheme, the price subsidy remains the preferred option.