Willingness to pay towards a public good: how does a refund option affect stated values?

O'Neill, Stephen and Yadav, Lava Prakash (2016) Willingness to pay towards a public good: how does a refund option affect stated values?. Journal of Environmental Planning and Management, 59 2: 342-359. doi:10.1080/09640568.2015.1010683

Author O'Neill, Stephen
Yadav, Lava Prakash
Title Willingness to pay towards a public good: how does a refund option affect stated values?
Journal name Journal of Environmental Planning and Management   Check publisher's open access policy
ISSN 1360-0559
Publication date 2016-02-01
Year available 2015
Sub-type Article (original research)
DOI 10.1080/09640568.2015.1010683
Open Access Status Not Open Access
Volume 59
Issue 2
Start page 342
End page 359
Total pages 18
Place of publication Abingdon, Oxon, United Kingdom
Publisher Routledge
Language eng
Subject 3305 Geography, Planning and Development
2312 Water Science and Technology
2300 Environmental Science
1507 Fluid Flow and Transfer Processes
2308 Management, Monitoring, Policy and Law
Abstract Mandatory taxes and/or voluntary contributions are commonly adopted as the payment vehicle when eliciting willingness to pay (WTP) in environmental valuation studies. While mandatory taxes may arouse negative feelings, voluntary contributions may lead to strategic behaviour (over bidding) or free riding (under bidding). In this paper, we explore an alternative payment vehicle which avoids the draconian undertones associated with taxes and may be more incentive compatible than a voluntary contribution – a tax that incorporates a refund option. The template for such a payment vehicle is the value added tax charged to tourists in Ireland, but which can be reclaimed on exiting the country. In the context of raising public funds to support the conservation of rural countryside landscape, a comparison is made between the elicited WTP via a mandatory tax and that elicited via the alternative payment method incorporating a refund option. While we observe similar participation rates between the two payment methods, the refund option reveals a higher stated WTP.
Keyword Beneficiary pays principle
Bivariate ordered probit
Refund option
Willingness to pay
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: School of Agriculture and Food Sciences
Official 2016 Collection
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