Temporal insensitivity of willingness to pay and implieddiscount rates

摘要

A number of studies have defined and tested the temporalsensitivity of willingness to pay to payment schemes and theresulting implied discount rates for environmental projects. Wedemonstrate that those studies have imposed restrictive assump-tions on the structure of the willingness to pay function and theunderlying decision process. We investigate the temporal sensi-tivity of willingness to pay using a new temporal willingness to payfunction applied to a proposed oyster reef restoration program. Wefind that (1) holding the length of the project constant, the temporalwillingness to pay for the project is the same across differentpayment schemes, (2) temporal willingness to pay does not varysignificantly across projects of varying lengths, and (3) estimateddiscount rates are low relative to previous studies, but varysignificantly across payment schemes and project lengths.