Stated Willingness to Pay for Public Goods: A Psychological Perspective

Daniel Kahneman, Ilana Ritov, Karen E. Jacowitz, Paul Grant

Research output: Contribution to journalArticlepeer-review

186 Scopus citations

Abstract

In the contingent valuation method for the valuation of public goods, survey respondents are asked to indicate the amount they are willing to pay (WTP) for the provision of a good. We contrast economic and psychological analyses of WTP and describe a study in which respondents indicated their WTP to prevent or to remedy threats to public health or to the environment, attributed either to human or to natural causes. WTP was significantly higher when the cause of a harm was human, though the effect was not large. The means of WTP for 16 issues were highly correlated with the means of other measures of attitude, including a simple rating of the importance of the threat. The responses are better described as expressions of attitudes than as indications of economic value, contrary to the assumptions of the contingent valuation method.

Original languageAmerican English
Pages (from-to)310-315
Number of pages6
JournalPsychological Science
Volume4
Issue number5
DOIs
StatePublished - Sep 1993
Externally publishedYes

Bibliographical note

Funding Information:
This study was supported by a Chevron grant for risk assessment research, administered by the University of California. We thank the San Francisco Exploratorium for facilitating the research, Carol E. Nickerson for help and advice, and Gary McClelland for helpful comments.

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