Eliciting values of public goods: Mitigating hypothetical bias and estimating private willingness to pay in the context of public budget choices.

摘要

Valuing public goods as essential for efficient allocation of resources. The contingent valuation method has become a fundamental tool used in valuing goods and services for which an ordinary market is absent. Despite success, there is a tendency for people to say they will pay more than they will actually pay. This so-called hypothetical bias remains a concern. This dissertation compares cheap talk and two forms of certainty statements as means to mitigate hypothetical bias in the context of willingness to pay for higher education, specifically the Kentucky Community and Technical College System. As part of the dissertation, a survey is created, tested, and used to collect primary data. The survey is administered by Knowledge Networks using their web-based panel and a random mail sample. Empirical results suggest that adjustment for hypothetical bias produces estimates of willingness to pay that are only a quarter to a third as large as unadjusted estimates. Cheap talk appears to lead respondents who answer yes to the valuation question to indicate responses with a higher level of certainty and subsequently a higher mean willingness to pay. The best estimate of mean willingness to pay of ;The dissertation also builds upon the estimates of private willingness to pay for higher education by linking it to public preferences over spending in state budget categories. A model is presented to show how individuals' private willingness to pay can be linked to state spending. Using the data from the survey administered by Knowledge Networks, empirical results suggest that individuals value state-wide educational services most highly, followed by healthcare services. Overall, the dissertation is intended to expand the tool kit for more accurate estimation of the benefits of public and publicly provided goods related to the environment, health, and education.;Keywords. Contingent valuation, hypothetical bias, certainty statements, returns to education, budget choices.