Can relief measures nudge compliance in a public health crisis? Evidence from a kinked fiscal policy rule

Deiana, Claudio;Geraci, Andrea;Mazzarella, Gianluca;Sabatini, Fabio

2022-01-01

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Abstract

We show that compensation measures aimed at improving the fairness of a crisis policy response can unintendedly nudge compliance with emergency rules. We combine infor-mation on the distribution of relief funds across Italian municipalities during the novel coronavirus pandemic with data tracking citizens' movements through mobile devices and navigation systems. To assess the impact of transfers on compliance, we exploit a sharp kink schedule in the allocation of funds. The empirical analysis provides evidence that compliance increased with transfers, suggesting that the observance of emergency rules also depends on the fairness of the pandemic policy response.(c) 2022 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license ( http://creativecommons.org/licenses/by/4.0/ )