How much do you reckon the average Australian would be willing to pay to avoid climate change?
Subscribe now for unlimited access.
or signup to continue reading
Keep in mind that, for almost every election over the last 20 years, voters have said that "action on climate change" is one of their top priorities. The answer? A measly $200.
There is a big disconnect on climate change between what voters say they want and what they actually want, particularly when it comes to their willingness to pay.
In economics jargon, it's the difference between voters' stated preferences and voters' revealed preferences. And climate change is just the tip of the (melting) iceberg.
More than 80 per cent of Australians surveyed by the Office of the Australian Information Commissioner want more privacy when it comes to data.
Yet, countless experiments show that voters will give away their privacy for just $29 - or for as little as a slice of pizza.
Four in five voters say that buying Australian-made is very important, but if the Australian product is even slightly more expensive, voters will buy the foreign product instead.
We see the same thing for so-called "sin products". If you ask people how much alcohol, tobacco and pornography they consume, their answers tend to be modest, or zero.
And yet, economy-wide data shows that Australians consume 191 million litres of alcohol each year and more than 15 billion cigarettes.
One-fifth of mobile internet searches are for pornography.
We lie in the opposite direction, too. About 80 per cent of Australians report giving a gift to charity over the last financial year.
But when we look at the tax data, only about 30 per cent actually did.
Voters say they want to increase the housing supply, but then oppose developments in their own neighbourhood, and violently oppose falling housing prices.
Australians often say they want principled politicians who plan for the long-term, but all the data shows voters are easily swayed by short-term issues.
Voters say they are worried about big tech, but ironically use social media through their smart phones to tell us this.
The list goes on.
Why is this hard for politicians? It's hard because politicians must make a bunch of decisions on these exact issues.
Politicians need to decide how much to tax alcohol and cigarettes, whether to regulate the internet and pornography, whether Big Tech should be reined in, whether to build more houses even if housing prices fall, whether to fight climate change even if it increases costs on households, whether to help fund charities or give through foreign aid, and whether to implement a long-term plan even if it involves some short-term pain.
For each of these issues, listening to what voters say could well lead politicians into electoral oblivion. We are already seeing this in the lead-up to the federal election and in states and territories, too.
The government's Future Made in Australia program was a $27 billion response to decades of voters saying they want more things to be made in this country.
Yet, the government has received little support from voters.
Local governments have responded to housing affordability concerns by proposing new developments, and then faced backlash and opposition for doing so.
Previous and current governments have significantly increased taxes on alcohol and tobacco. Rather than praising the government, consumers have circumvented the taxes through a surge in illicit tobacco and bootleg alcohol.
Now the government is clamping down on Big Tech; restricting the age at which people can access social media and proposing a bunch of new regulations on tech companies.
Will it work? Do voters actually want this?
They say they do, but they also objectively get a lot of value from these services.
What should governments do?
The main lesson is that governments should focus on what voters do, not what voters say. Modern datasets allow us to do this. We don't ask people what they favourite song was in 2024, we just look at data from Spotify. We don't ask people what they bought online this year, we just look at what's trending on Amazon.
READ MORE:
We don't wonder how busy the roads are, we just look at the data on Google Maps. Politicians should do the same. If you're relying on surveys, you're in trouble.
Politicians should also interrogate the nuance of voters' positions.
In some instances, voters are flat-out lying. They might say they don't care if the government bans pornography, bans cigarettes and makes alcohol more expensive, but it would be a brave government who does any of these things.
In other instances, it's about digging deeper on what voters want. When voters say they want action on climate change, more privacy and more homes for the disadvantaged, they probably aren't lying: they just don't want to pay for it themselves.
There's no such thing as a free lunch, but there are plenty of ways that politicians can deliver these things in ways that don't have big, obvious direct costs. We just need to be more creative.
So, the next time you complain during the upcoming election that politicians lie and deceive the public, just remember this: you lie to them, too.
- Adam Triggs is a partner at the economics advisory firm, Mandala, and a visiting fellow at the ANU Crawford School and a non-resident fellow at the Brookings Institution.
