The Dollars and Sense of Ballot Propositions: Estimating Willingness to Pay for Public Goods Using Aggregate Voting Data

Jesse Burkhardt and Nathan Chan

Journal of the Association of Environmental and Resource Economists, 2017, vol. 4, issue 2, 479 - 503

Abstract: This paper develops a new approach for estimating willingness to pay (WTP) for public goods using referendum voting data, and we demonstrate the approach by applying it to a series of referenda in California spanning a wide array of public goods. We find a range of annual WTP values for successful propositions from $3.47 per person for children’s hospitals to $94.48 per person for transportation infrastructure and management. We also impute the per capita cost of each proposition. Comparing these imputed costs to our WTP measure allows us to infer the upper bound on prices that would still ensure passage of a successful measure. Conversely, this comparison provides an estimate of the decrease in prices that would have been necessary to ensure passage of unsuccessful propositions. In addition, we estimate the relative effects of prices, income, and ideology on the support for public goods. We show that both ideology and economic costs have significant impacts, which stands in contrast to previous work that contends that voting patterns are driven purely by fiscal costs.

Date: 2017
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