Guidelines for Shaping Perceptions of Fairness of Transportation Infrastructure Policies: The Case of a Vehicle Mileage Tax

Regulatory focus theory is used to study individuals’ perceptions of fairness towards a Vehicle Miles Traveled (VMT)-based transportation funding policy. According to regulatory focus theory, messages are more effective when they are congruent with the goal framing promotion (gains) or prevention (loss avoidance) focus of the recipients (i.e., there is a regulatory fit). This study confirms an interaction effect when the information in a message is congruent with the regulatory orientation of the individual. In addition, we find that the sensitivity towards fairness is more pronounced when subjects exhibit a prevention fit than when they exhibit a promotion fit. Our findings emphasize the importance of regulatory focus as it concerns public perceptions of potential transportation funding policy and provide useful guidelines for related outreach messaging strategies for influencing them. Progress towards an efficient transportation infrastructure policy, which maximizes the spread between social benefits and costs of use, hinges on the public’s ability to raise the necessary funds to finance it (Winston 1991). Efficient highway infrastructure policy certainly relies on effective road pricing. Yet, despite decades-old calls to alter a highway-pricing scheme reliant on fuel taxes (e.g., see Winston 1991), these taxes remain the largest source of revenue for U.S. highway development, improvement, and upkeep, at both federal and state levels (Upchurch 2006). And the problem is unlikely to abate in the near future. While the National Surface Transportation Infrastructure Financing Commission (NSTIF) recently concluded that a Vehicle Miles Traveled (VMT) system would be the best solution for replacing the gas tax and ensuring adequate financing for highway infrastructure investment needs (NSTIF 2009), the Obama administration declared that it would not support implementation of a vehicle mileage tax. The administration’s rejection belies a major constraint that plagues the adoption of administrative or legislative policy whose need is Ms. Krishen is assistant professor of marketing, University of Nevada Las Vegas, Las Vegas, Nevada 89154. Ms. Raschke is assistant professor of accounting, University of Nevada Las Vegas. Mr. Mejza is associate professor of marketing, University of Nevada Las Vegas. obvious to many: It must be pertinent to all, especially the general public. Arguably, then, controversial transportation policy deliberations are shaped by expected public acceptance or, conversely, rejection of the wished-for courses of action. For example, a contentious feature of a 2005 initiative by the California legislature to address that state’s transportation funding calamity called for lowering the gasoline sales tax by five percentage points and offsetting the revenue loss from gas sales with a quarter percent increase in the general sales tax. This counterintuitive proposal, which could encourage more vehicle miles driven while exposing non-drivers to a greater onus of transportation funding (Sorensen 2006), was spurred by legislator concern about public acceptance of a gasoline sales tax increase (Nunez 2005). Thus, the development and implementation of transportation policies involve the gauging of public receptiveness, which implies that a sharper lens for how such receptiveness develops is important. The extant literature on transportation financing, motivated by usually low public acceptance of transportation pricing policies, has commendably improved our ability to explain what drives public acceptance in this area. For example, Schuitema and Steg (2007) show that public acceptance of a kilometers-driven tax varies with an individual’s belief about where 2010 VEHICLE MILEAGE TAX 25 the revenue generated by the tax will be allocated. This stream of research has also increased the call for better outreach efforts that are informed by the findings evident in it. Buckeye and Munnich, Jr. (2004) and Li (2007), for instance, argue that broad outreach programs are needed to win public support of managed lane programs such as congestion, road use, value pricing, high-occupancy-vehicle (HOV) and high-occupancy toll (HOT) lanes. Yet, little guidance beyond anecdotal suggestions for outreach efforts appears in this body of research. The aim of this study is to expand the framework for outreach about policy measures designed to address pressing transportation problems. Specifically, we look more closely at the underlying mechanism driving the call by researchers for customized messaging strategies to help build transport policy support. To do so, we invoke regulatory focus theory, which argues that one’s openness to an idea depends on the degree to which the presentation of the idea complements one’s goal orientation. Using an experimental setting, we demonstrate how perceptions about a controversial proposed transportation policy change, the replacement of the gasoline tax with a Vehicle Miles Traveled (VMT) tax, can be swayed by the manner in which messages portraying the proposal are framed. While we couch our study in the context of a proposed state-level VMT tax, implications for federalor state-level management of public acceptance are commensurate. Our results corroborate that an individual’s perception of fairness, an antecedent to acceptability of a specific transport policy measure (Eriksson, Garvill, and Nordlund 2008), can be altered via customizedmessaging and can provide a basis for outreach planning efforts for new, potentially contentious transport policy measures. We begin by detailing the motivation for and nature of a VMT highway pricing system. Next, we summarize research into the process of public acceptance of transportation policy and invoke regulatory focus theory to build hypotheses about the effects of customized messages on perceptions of a VMT tax. The last four sections describe the empirical methodology used to corroborate the hypotheses, discuss our experimental results, and state conclusions and implications. A VEHICLE-MILES-TRAVELED HIGHWAY PRICING SYSTEM A key transportation infrastructure issue confronting the United States government today is how to best finance the upkeep and expansion of its highway system. This problem has arisen in great part because gas tax receipts, at least at the federal level, have not been indexed to inflation and, over time, particularly since 1993 when federal fuel taxes were last raised, the purchasing power of fuel tax revenues has declined (Puentes and Prince 2003). Moreover, variable fuel efficiency across the U.S. automobile and trucking fleets distorts the level of infrastructure usage that can be gauged from fuel tax revenues, a condition that has been exacerbated by the trend towards the use of more fuel-efficient vehicles. Indeed, since 1980, road usage has doubled while consumption of fuel has increased by 50 percent (Sorensen et al. 2009). In light of these shortcomings, the NSTIF recently identified a VMT system as the best way to close the gap between revenues from the Highway Trust Fund and investment projects authorized by law. Under a VMT system, road usage would be taxed based on the number of miles vehicles are driven. Assessment and collection mechanisms would likely involve GPS technology solutions, which would be costly to establish and not without controversy. For example, access to the data collected by outside agencies, e.g., law enforcement bureaus, has raised concern about potential erosion of privacy rights brought on by a VMT system. Although the Obama administration has shelved pursuit of a VMT tax at this time, the idea is not likely to fade from public debate. A recent call by the chair of the House Transportation and Infrastructure Committee suggests deliberation could reemerge at the federal level. Regardless of federal-level discussion, state-level implementation is under consideration in a number of states. TheOregon Department of Transportation (ODOT), for example, recently conducted a pilot program of a VMT system that involved 299 volunteers over a twelve-month period. A follow-up survey indicated volunteers were satisfied with most aspects of the program (Whitty 2007). Although 26 TRANSPORTATION JOURNALTM Summer it did not explicitly assess it, the ODOT suggested that fairness of a VMT system as it relates to public acceptance is an implementation issue that should be addressed. Other stakeholders have expressed skepticism about abandoning fuel tax financing. The American Trucking Associations and American Bus Association, for example, suggest that fuel tax funding may still be adequate given high enough tax rates and proper appropriation of fuel tax revenues (Edmonson 2009a, 2009b). Still others see promise in a middle ground using both types of taxes. Parry (2008, 652) estimated optimal social welfare gains would be obtained for “‘ . . . a diesel fuel tax of 69 cents per gallon and charges on trucks that vary between 7 and 33 cents per mile’’ for heavy truck users. Despite the NSTIF recommendation of a VMT policy as the optimal long-term solution, it is clear that public support for this option remains a concern (Miller 2009). Findings from public opinion surveys, which indicate low acceptance for road pricing alternatives, including fuel taxation, led the NSTIF to conclude, “‘Public opinion is critical to the success of pricing initiatives’’ (NSTIF 2009, 141). Given the likelihood of continued debate at the state or federal level about implementing VMT tax measures, an understanding of potential public response to such a policy is called for (Sorensen et al. 2009). To gain such understanding, we will assess individual perceptions of fairness of a VMT tax policy. Extant research shows that public perceptions of fairness are critical in terms of mitigating retaliatory behavior (Brebels, De Cremer, and Sedikides 2008), increasing the amount of citizenship behavior and attitudes (Cropanzano, Paddock, Rupp, Bagger, a