A recent piece in Vanity Fair about Iceland implied, among a score of other half-truths and silly gossip, that in order for a new business to receive a permit to build, there needs to be an impact study to ensure that no elves are displaced by the construction. The government does require a study be performed to ensure that no religious ruins or artifacts are destroyed by new building, and to see if the site is listed in any important folklore. (Some of which revolves around the doings of elves.) But there is zero implication that the Icelanders believe that the elves even exist, much less that they may be put out on the street to beg for food and cheap whiskey. They just want their heritage and cultural icons protected.
(Though I’m still hoping the elves really exist!)