Stated Willingness to Pay for Public Goods: A Psychological Perspective

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.