The value of familiarity: Effects of knowledge and objective signals on willingness to pay for a public good

LaRiviere, J., Czajkowski, M., Hanley, N. , Aanesen, M., Falk-Petersen, J. and Tinch, D. (2014) The value of familiarity: Effects of knowledge and objective signals on willingness to pay for a public good. Journal of Environmental Economics and Management, 68(2), pp. 376-389. (doi: 10.1016/j.jeem.2014.07.004)

Abstract

We design and conduct a field experiment in which treated subjects receive a precise and objective signal regarding their knowledge about a public good before estimating their WTP for it. We find that the causal effect of objective signals about the accuracy of a subject׳s knowledge for a public good can dramatically affect their valuation for it: treatment caused a significant increase of $85–$129 in WTP for well-informed individuals. We find no such effect for less informed subjects. Our results imply that WTP estimates for public goods are not only a function of true information states of the respondents but beliefs about those information states.

• Item Type: Articles
• Additional Information: The data from the cold water coral survey was collected as part of the project "Habitat-Fisheries interactions - Valuation and bio-economic modeling of Cold Water Coral", funded by the Norwegian Research Council (grant no 216485). DT’s inputs were funded by MASTS, the Marine Alliance Science and Technology Scotland (www.masts.ac.uk).
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Hanley, Professor Nicholas
• Authors: LaRiviere, J., Czajkowski, M., Hanley, N., Aanesen, M., Falk-Petersen, J., and Tinch, D.
• College/School: College of Medical Veterinary and Life Sciences > School of Biodiversity, One Health & Veterinary Medicine
• Journal Name: Journal of Environmental Economics and Management
• Publisher: Elsevier
• ISSN: 0095-0696
• ISSN (Online): 1096-0449
• Published Online: 08 August 2014