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Individual and Household Willingness to Pay for Public Goods

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  • John Quiggin

Abstract

The issue of whether willingness to pay (WTP) for the benefits generated by a public good should be elicited on an individual or on a household basis is addressed. Differences between individual and household WTP may arise when members of the household are mutually altruistic. It is shown that, for general specifications of altruism, household WTP is less than the sum of household members' individual WTP. Implications for the choice between household and individual measures of WTP are considered, and issues in the elicitation of household WTP are addressed. Copyright 1998, Oxford University Press.

Suggested Citation

  • John Quiggin, 1998. "Individual and Household Willingness to Pay for Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 58-63.
  • Handle: RePEc:oup:ajagec:v:80:y:1998:i:1:p:58-63
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    File URL: http://hdl.handle.net/10.2307/3180268
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    Citations

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    Cited by:

    1. Delaney, Liam & O'Toole, Francis, 2008. "Individual, household and gender preferences for social transfers," Journal of Economic Psychology, Elsevier, vol. 29(3), pages 348-359, June.
    2. Messer, Kent D. & Poe, Gregory L. & Schulze, William D., 2008. "The Value of Private Risk Versus the Value of Public Risk: An Experimental Analysis of the Johannesson et al. Conjecture," Working Papers 51141, Cornell University, Department of Applied Economics and Management.
    3. Jon Strand, 2005. "Individual and Household Values of Mortality Reductions with Intrahousehold Bargaining," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 217-236, September.
    4. Strand.J., 2001. "Public- and private-good values of statistical lives : results from a combined choice-experiment and contingent-valuation survey," Memorandum 31/2001, Oslo University, Department of Economics.
    5. Jon Strand, 2007. "Public-good valuation and intra-family allocation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(4), pages 527-543, December.
    6. Udo Ebert, 2013. "The relationship between individual and household measures of WTP and WTA," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(2), pages 367-390, February.
    7. Lindhjem, Henrik, 2007. "20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: A meta-analysis," Journal of Forest Economics, Elsevier, vol. 12(4), pages 251-277, February.
    8. Venn, Tyron J. & Quiggin, John, 2007. "Accommodating indigenous cultural heritage values in resource assessment: Cape York Peninsula and the Murray-Darling Basin, Australia," Ecological Economics, Elsevier, vol. 61(2-3), pages 334-344, March.
    9. V. Smith & George Van Houtven, 2004. "Recovering Hicksian Consumer Surplus within a Collective Model: Hausman's Method for the Household," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(2), pages 153-167, June.
    10. Martina Menon & Federico Perali & Marcella Veronesi, 2014. "Recovering Individual Preferences for Non-Market Goods: A Collective Travel-Cost Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(2), pages 438-457.
    11. Mahmoud K. El-Jafari, 2013. "Palestinian Household Willingness and Ability to Pay for Public Utilities in The West Bank: The Case of Electricity and Water," Working Papers 784, Economic Research Forum, revised Oct 2013.
    12. Venn, Tyron J. & Quiggin, John C., 2006. "Accommodating Indigenous Cultural Heritage Values in Resource Assessment," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139919, Australian Agricultural and Resource Economics Society.
    13. Carlsson, Fredrik & He, Haoran & Martinsson, Peter & Qin, Ping & Sutter, Matthias, 2012. "Household decision making in rural China: Using experiments to estimate the influences of spouses," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 525-536.
    14. Yang, Xiaojun & Carlsson, Fredrik, 2012. "Intra-household decisions making on intertemporal choices: An experimental study in rural China," Working Papers in Economics 537, University of Gothenburg, Department of Economics.
    15. Smith, V. Kerry & Van Houtven, George, 1998. "Non-Market Valuation and the Household," Working Papers 98-04, Duke University, Department of Economics.
    16. Barrio, Melina & Loureiro, Maria L., 2010. "A meta-analysis of contingent valuation forest studies," Ecological Economics, Elsevier, vol. 69(5), pages 1023-1030, March.
    17. Munro, Alistair, 2005. "Household willingness to pay equals individual willingness to pay if and only if the household income pools," Economics Letters, Elsevier, vol. 88(2), pages 227-230, August.
    18. Liam Delaney & Francis O’Toole, 2006. "Willingness to pay: individual or household?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(4), pages 305-309, December.
    19. Strand, Jon, 2006. "Valuation of environmental improvements in continuous time with mortality and morbidity effects," Resource and Energy Economics, Elsevier, vol. 28(3), pages 229-241, August.

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