Rebate Versus Matching, Again: How Opt-in Reshapes the Effectiveness of Price-Equivalent Subsidies

Collaborator

• Shusaku Sasaki (The University of Osaka)
• Takunori Ishihara (Kyoto University of Advanced Science)

Abstract

Traditional theory predicts equivalent effects of matching and rebate subsidies at equal prices, yet experiments favor matching. Refinements narrow this gap but retain compulsory assignment; take-up is voluntary in practice. We test this implementation margin in a nationwide, incentivized donation experiment with 2,400 Japanese adults, crossing subsidy type and assignment rule. After equalizing budget constraints and accounting for comprehension, total giving is indistinguishable under compulsory assignment. Under opt-in, the matching advantage re-emerges and nearly quadruples because rebate loses effectiveness. LATE estimates suggest advantageous selection into matching but disadvantageous selection into rebate. Self-selection can reshape the policy ranking of price-equivalent instruments.

Discussion paper

• [Latest version] arXiv, 2026. [Full-text link]
• CiDER Discussion Paper (Center for Infectious Disease Education and Research, Osaka University), 2023. [Full-text link]