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Public Funding of Environmental Amenities: Contingent Choices Using New Taxes or Existing Revenues for Coastal Land Conservation

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  • Stephen K. Swallow
  • Michael P. McGonagle

Abstract

Alternative funding approaches affect stated preferences. An individual’s willingness to reallocate existing tax dollars exceeds willingness to pay new taxes to conserve land. However, stated preferences also imply a non-zero opportunity cost to existing tax dollars; different income groups reveal statistically equivalent marginal utilities both for income and for reallocating tax dollars. Yet individuals with lower income show a relatively larger increase in their willingness to support land conservation, when the choice shifts from new taxes to reallocation of existing tax dollars. The paper encourages consideration of equity implications that may be obscured when analysts focus on willingness to pay.

Suggested Citation

  • Stephen K. Swallow & Michael P. McGonagle, 2006. "Public Funding of Environmental Amenities: Contingent Choices Using New Taxes or Existing Revenues for Coastal Land Conservation," Land Economics, University of Wisconsin Press, vol. 82(1), pages 56-67.
  • Handle: RePEc:uwp:landec:v:82:y:2006:i:1:p:56-67
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    References listed on IDEAS

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    1. Michael P. McGonagle & Stephen K. Swallow, 2005. "Open Space and Public Access: A Contingent Choice Application to Coastal Preservation," Land Economics, University of Wisconsin Press, vol. 81(4).
    2. Opaluch James J. & Swallow Stephen K. & Weaver Thomas & Wessells Christopher W. & Wichelns Dennis, 1993. "Evaluating Impacts from Noxious Facilities: Including Public Preferences in Current Siting Mechanisms," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 41-59, January.
    3. Kline, Jeffrey & Wichelns, Dennis, 1998. "Measuring heterogeneous preferences for preserving farmland and open space," Ecological Economics, Elsevier, vol. 26(2), pages 211-224, August.
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    5. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
    6. Portney, Paul R., 2004. "The Obligations of a Policy Economist," Agricultural and Resource Economics Review, Cambridge University Press, vol. 33(02), pages 159-161, October.
    7. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    8. Jean-Jacques Laffont, 1988. "Fundamentals of Public Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121271, January.
    9. Krutilla, John V., 1981. "Reflections of an applied welfare economist : Presidential Address Presented at the Annual Meeting of the Association of Environmental and Resource Economists September 6, 1980, Denver, Colorado," Journal of Environmental Economics and Management, Elsevier, vol. 8(1), pages 1-10, March.
    10. Ian Hardie & Ivar Strand, 1979. "Measurement of Economic Benefits for Potential Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 313-317.
    11. Johnston, Robert J. & Swallow, Stephen K. & Weaver, Thomas F., 1999. "Estimating Willingness to Pay and Resource Tradeoffs with Different Payment Mechanisms: An Evaluation of a Funding Guarantee for Watershed Management," Journal of Environmental Economics and Management, Elsevier, vol. 38(1), pages 97-120, July.
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    Citations

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    Cited by:

    1. Oviedo, José L. & Caparrós, Alejandro & Ruiz-Gauna, Itziar & Campos, Pablo, 2016. "Testing convergent validity in choice experiments: Application to public recreation in Spanish stone pine and cork oak forests," Journal of Forest Economics, Elsevier, vol. 25(C), pages 130-148.
    2. Dmitriy Volinskiy & Michele Veeman & Wiktor Adamowicz, 2011. "Allocation of public funds to R&D: a portfolio choice-styled decision model and a biotechnology case study," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 34(2), pages 121-139, November.
    3. Wilson, Amanda, 2010. "Coastal planning in North Shore City, New Zealand: Developing responsible coastal erosion policy," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 59260, Australian Agricultural and Resource Economics Society.
    4. Kyriaki Remoundou & Fikret Adaman & Phoebe Koundouri & Paulo Nunes, 2014. "Is the value of environmental goods sensitive to the public funding scheme? Evidence from a marine restoration programme in the Black Sea," Empirical Economics, Springer, vol. 47(4), pages 1173-1192, December.
    5. Ozdemir, Semra & Johnson, F. Reed & Whittington, Dale, 2016. "Ideology, public goods and welfare valuation: An experiment on allocating government budgets," Journal of choice modelling, Elsevier, vol. 20(C), pages 61-72.
    6. Bell, Brian A. & Menzies, Sharon & Yap, Michael & Kerr, Geoffrey N., 2008. "Assessing the marginal dollar value losses to an estuarine ecosystem from an aggressive alien invasive crab," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5978, Australian Agricultural and Resource Economics Society.
    7. Michael P. McGonagle & Stephen K. Swallow, 2005. "Open Space and Public Access: A Contingent Choice Application to Coastal Preservation," Land Economics, University of Wisconsin Press, vol. 81(4).
    8. McCartney, Abbie & Cleland, Jonelle, 2010. "Choice Experiment Framing and Incentive Compatibility: observations from public focus groups," Research Reports 107575, Australian National University, Environmental Economics Research Hub.
    9. Achyut Kafle & Stephen K. Swallow & Elizabeth C. Smith, 2015. "Does Public Funding Affect Preferred Tradeoffs and Crowd-In or Crowd-Out Willingness to Pay? A Watershed Management Case," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(3), pages 471-495, March.
    10. Burton, Michael & Jasmine Zahedi, Shegufa & White, Ben, 2012. "Public preferences for timeliness and quality of mine site rehabilitation. The case of bauxite mining in Western Australia," Resources Policy, Elsevier, vol. 37(1), pages 1-9.

    More about this item

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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