Purpose – The purpose of this paper is to provide a theoretical framework for the assessment of subjective value of public goods. Public goods are not traded, so they do not have market prices, even if they may be of great importance for the well-being of citizens (e.g. green spaces, urban air). A procedure used to estimate the economic value of a public good is the contingent evaluation method: people are asked to state how much they are willing to pay to preserve or restore a public good. Many studies report that the subjective evaluation of public goods is affected by factors that, according to standard economics, should be irrelevant, such as the manipulation of frame and prime. On the other hand, factors that should be relevant, such as the magnitude of the expected benefit, are neglected. It appears that the evaluation of a public good cannot be reduced to a mere cost– benefit tradeoff evaluation. On the contrary, it seems that the subjective value of a public good is constructed. The authors argue that to accurately predict and describe how people valuate public goods, it is fundamental to study how people construct the associated mental representation. Design/methodology/approach – This paper takes into account the cognitive and emotional aspects of the evaluation of public goods. Findings – Subjective valuation of public goods is affected by irrelevant factors and is not affected by relevant factors. Practical implications – This paper provides an accurate description and prediction of how people evaluate public goods. Social implications – The social implications of this paper include a better evaluation of public policies. Originality/value – This paper is an original psychological perspective on the evaluation of public goods.
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- Category-bound thinking
- Contingent evaluation
- Economic psychology
- Psychological factors
- Public goods
- Subjective value