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

Jacob LaRiviere, Mikolaj Czajkowski (), Nick Hanley (), Margrethe Aanesen, Falk-Petersen, Jannike and Dugald Tinch

Journal of Environmental Economics and Management, 2014, vol. 68, issue 2, 376-389

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.

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)
Date: 2014
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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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