Energy subsidies versus cash transfers: the causal effect of misperceptions on public support for countermeasures during the energy crisis

Abstract

In reaction to the energy crisis that has unfolded since 2021, governments have implemented countermeasures to protect citizens against energy price hikes. In this article, we study public support for four government countermeasures in the United Kingdom and in France (N_total = 4600): energy subsidies and cash transfers, both either universal or targeted towards vulnerable households. In Study 1, we find that citizens prefer energy subsidies to cash transfers, and especially universal energy subsidies, despite their negative social and environmental impacts. In Study 2, we show that this preference for universal energy subsidies is partly due to widespread misperceptions about the cost, social impact, and environmental impact of this policy. Correcting these misperceptions lowers support for universal energy subsidies in the UK and increases relative mean support for the three other policies in France. In Study 3, we show that citizens also misperceive the effectiveness of targeted cash transfers, a policy that is socially fairer and more environmentally friendly than universal subsidies. Correcting this misperception increases support for targeted cash transfers in the UK but not in France.