When does a referent problem affect willingness to pay for a public good?
In two studies we examined the willingness to support action to remedy a public problem. In Study 1 people were asked whether they would financially contribute to solution of a public problem. In Study 2, people were asked whether they would sign a petition to support a public action. The aim was to test whether the willingness to support solution of a public problem is affected by the type of problem that is used as the referent. We hypothesized that the willingness to support a public action is lower when evaluated in the context of a high - as opposed to a low - importance referent problem (importance contrast effect). We also hypothesized that the importance contrast effect is tied to the perceived relatedness between the target and referent problems. The importance contrast effect should be found only when the two problems relate to different category domains. The findings bear out this prediction.
|Date of creation:||Sep 2007|
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- Jorgensen, Bradley S. & Syme, Geoffrey J. & Smith, Leigh M. & Bishop, Brian J., 2004. "Random error in willingness to pay measurement: A multiple indicators, latent variable approach to the reliability of contingent values," Journal of Economic Psychology, Elsevier, vol. 25(1), pages 41-59, February.
- Irwin, Julie R, et al, 1993. " Preference Reversals and the Measurement of Environmental Values," Journal of Risk and Uncertainty, Springer, vol. 6(1), pages 5-18, January.
- Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
- Bonini, Nicolao & Biel, Anders & Garling, Tommy & Karlsson, Niklas, 2002. "Influencing what the money is perceived to be worth: Framing and priming in contingent valuation studies," Journal of Economic Psychology, Elsevier, vol. 23(5), pages 655-663, October.
- Kahneman, Daniel & Ritov, Ilana, 1994. "Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 5-38, July.
- Dan Ariely & George Loewenstein & Drazen Prelec, 2003. ""Coherent Arbitrariness": Stable Demand Curves Without Stable Preferences," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 73-105, February.
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