Moral Suasion and the Private Provision of Public Goods: Evidence from the COVID-19 Pandemic.

We study how moral suasion that appeals to two major ethical theories, Consequentialism and Deontology, affects individual intentions to contribute to a public good. We use the COVID-19 pandemic as an exemplary case where there is a large gap between private and social costs and where moral suasion has been widely used as a policy instrument. Based on a survey experiment with a representative sample of around 3500 Germans at the beginning of the pandemic, we study how moral appeals affect contributions with low and high opportunity costs, hand washing and social distancing, to reduce the infection externality as well as the support for governmental regulation. We find that Deontological moral suasion, appealing to individual moral duty, is effective in increasing planned social distancing and hand-washing, while a Consequentialist appeal only increases planned hand-washing. Both appeals increase support for governmental regulation. Exploring heterogeneous treatment effects reveals that younger respondents are more susceptible to Deontological appeals. Our results highlight the potential of moral appeals to induce intended private contributions to a public good or the reduction of externalities, which can help to overcome collective action problems for a range of environmental issues.

The social cost of contacts: Theory and evidence for the first wave of the COVID-19 pandemic in Germany.

Building on the epidemiological SIR model, we present an economic model with heterogeneous individuals deriving utility from social contacts creating infection risks. Focusing on social distancing of individuals susceptible to an infection we theoretically characterize the gap between private and social cost of contacts. Our main contribution is to quantify this gap by calibrating the model with unique survey data from Germany on social distancing and impure altruism from the beginning of the COVID-19 pandemic. The optimal policy is to drastically reduce contacts at the beginning to almost eradicate the epidemic and keep them at levels that contain the pandemic at a low prevalence level. We find that also in laissez faire, private protection efforts by forward-looking, risk averse individuals would have stabilized the epidemic, but at a much higher prevalence of infection than optimal. Altruistic motives increase individual protection efforts, but a substantial gap to the social optimum remains.