Declared Preference Method—Research Experiment Concerning Air Quality

Małgorzata Burchard-Dziubińska (), Elżbieta Antczak () and Agnieszka Rzeńca ()
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Małgorzata Burchard-Dziubińska: University of Lodz
Elżbieta Antczak: University of Lodz
Agnieszka Rzeńca: University of Lodz

Chapter Chapter 26 in Experimental and Quantitative Methods in Contemporary Economics, 2020, pp 365-379 from Springer

Abstract: Abstract Externalities take place when an economic operator does not experience all costs (in case of negative externalities) or benefits (in case of positive externalities) involved in his activities, which are passed on to other economic operators. Specific challenge to economists is posed by negative technological externalities, which have also triggered experimental research studies using the declared (stated) preference method. The aim of the experiment was to find the most preferred solution geared towards the elimination of the source of air pollution in a village and to learn about respondents’ willingness to pay (WTP) for the public good supplied as a result of such elimination. Out of the five proposed options, one of the most preferred by respondents was a voluntary fundraising initiative to collect money for the construction of the neighbour’s connection that would go on until they collect PLN 10 k but not longer than for a year. By using the WTP method, we arrived at an unambiguous valuation of the good expressed in terms of money. The most preferred tax rate revealed as a result of the survey suggests that the valuation of the public good was underestimated. As a result, the situation described in the case study cannot be resolved successfully.

Keywords: Public goods; Externalities; Declared preference method; Air pollution (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-30251-1_26

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DOI: 10.1007/978-3-030-30251-1_26

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