Individuals' valuation of a publicly provided private good evidence from a field study

Abstract

This paper assesses the Willingness to Pay (WTP) for a publicly provided bike sharing service whose costs are in large part covered by the municipality of Vienna, Austria. The following characteristics render it valuable for analyses: the possibility to free ride, a (perceived) positive externality of use, negligible income effects, perfect substitutability, and the credibility of valuation scenarios. We also address the disparity between Willingness to Accept (WTA) and WTP, and we find a mean WTP of EUR 1.2 for the bike sharing system and a disparity of 2:1 (WTA to WTP). Female participants as well as respondents who condition their valuation on those of others are willing to contribute more; and surprisingly those who actually use the bike sharing system as well as environmentally concerned respondents have a lower WTP. This Environmental Concern Paradox can be explained by an incorporation of positive externalities into individual valuation decisions.

Do spatial climate messages increase pro-environmental engagement? Evidence from a survey experiment on public transport

“…More than 60 % of all participants indicated a positive WTP for the combined ticket, and almost half of those who do not have any financial incentive did so as well. This corroborates previous research from the transport domain suggesting that even without a direct use value, some people are willing to financially contribute to a system that makes it easier for others to use sustainable mobility, arguably expecting that this will create beneficial externalities (Spindler, Dehnavi, and Wirl 2019).…”

“…That allows us to additionally investigate our treatments for people without direct monetary benefits. Thereby, we extend related studies from the transport domain, such as Spindler, Dehnavi, and Wirl (2019), who find that respondents who have not used a bike sharing system in Vienna in the past 12 months on average still express a considerable WTP for the public provision of it.…”

Endowment Effect, Information Asymmetry, and Real Estate Market Decisions: Willingness to Pay and Willingness to Accept Disparities

“…A contingent valuation approach was used to estimate the willingness to pay, willingness to accept, and agents' evaluations. There is growing literature using contingent valuations to estimate the willingness to pay and the willingness to accept in environmental goods (Peng et al, 2022), public goods (Spindler et al, 2019), healthcare (Martín-Fernández et al, 2021) and energy (Meles et al, 2021). The contingent valuation method is the most widely used technique to measure willingness to accept and willingness to pay.…”