Contingent Valuation and Incentives

Abstract

We empirically investigate the effect of the payment mechanism on contingent values by asking a willingness-to-pay question with one of three different payment mechanisms: individual contribution, contribution with provision point, and referendum. We find statistical evidence of more affirmative responses in the referendum treatment relative to the individual contribution treatment, some weak statistical evidence of more affirmative responses in the referendum treatment relative to the provision point treatment, and no statistical evidence of more affirmative responses in the provision point treatment relative to the individual contribution treatment. The relative credibility of the three payment mechanisms is also examined. (JEL H41, Q26)