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Matching grants are commonly used to influence the bundle of public goods provided by governments. We design a contingent valuation experiment to determine the value individuals place on improved recreational facilities under a matching grant proposal. The experiment provides an opportunity to examine preferences given the public good exists in an active and well-defined market, and the valuation experiment is perceived as meaningful to public policy. We estimate a mean willingness-to-pay for park improvements of $8.30, far less than the implied tax increase of $21 provided by local politicians opposed to the project, but nearly doubled the actual tax increase for the average property owner. Disciplines Finance | Public Economics ABSTRACTMatching grants are commonly used to influence the bundle of public goods provided by governments. We design a contingent valuation experiment to determine the value individuals place on improved recreational facilities under a matching grant proposal. The experiment provides an opportunity to examine preferences given the public good exists in an active and well-defined market, and the valuation experiment is perceived as meaningful to public policy. We estimate a mean willingness-to-pay for park improvements of $8.30, far less than the implied tax increase of $21provided by local politicians opposed to the project, but nearly double the actual tax increase for the average property owner.

In addition to neighborhood characteristics, the structural and physical attributes of residential properties introduce significant biases into the assessment of property values and represent an important source of administrative inequity in the property tax. A model is presented which captures the influence of dwelling characteristics on both the constant and slope parameters in the traditionally employed linear relationship between assessed and market values. The model is tested using a sample of properties taken from three western counties in North Carolina. The results support the hypothesis that different types of properties with equivalent market values may receive significantly different assessments.

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