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Attentuation of Free Riding in Environmental Valuation: Evidence from Field Experiment: Contingent Valuation Method

Research output: Other research outputDiscussion paper

Standard economic theory suggests that agents make decision based on the outcomes. Subsequently, environmental valuation using contingent valuation method (CVM) assumes the agent’s valuation of a given environmental good is based on the (expected) results. However, Bulte et al. (2005) found that causes in addition to outcomes matter in valuation. I extended this notion to contribute to design of CVM that attenuate free riding, thus remove the downward bias of method. I used field experiment and tested if designing a scenario that reinforce responsibility in decision making (valuation), attenuates free riding. I do so by eliciting contributions to a reforestation program among farmers in an environmentally valuable area, the Bale eco-Region in Ethiopia, by including or omitting explicit information that one of the main forest related activities the respondents engage in, logging, is among the most important causes of local forest degradation. I find that explicitly stating that logging is one of the main causes of deforestation increases our respondents’ willingness to pay. More interestingly, I find that this “responsibility effect” is sufficiently strong to eliminate free rider behavior. When the information about the cause of deforestation is in place, the respondents’ willingness to pay for the reforestation project is not significantly different if they are informed of other forest protection projects, or not.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages26
Volume2017-029
StatePublished - 20 Jul 2017

Publication series

NameCentER Discussion Paper
Volume2017-029

    Research areas

  • valuation of environment, incentive compatible valuation techniques, conservation, field experiment, forestry, public goods

Documents

  • 2017-029

    Submitted manuscript, 894 KB, PDF-document

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