The value of familiarity: Effects of knowledge and objective signals on willingness to pay for a public good
Mikolaj Czajkowski (),
Nick Hanley (),
Falk-Petersen, Jannike and
Journal of Environmental Economics and Management, 2014, vol. 68, issue 2, 376-389
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.
Keywords: Information; Beliefs; Field experiment; Valuation; Uncertainty; Choice experiment (search for similar items in EconPapers)
JEL-codes: C93 Q51 D83 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:68:y:2014:i:2:p:376-389
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