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Declared Preference Method—Research Experiment Concerning Air Quality

In: Experimental and Quantitative Methods in Contemporary Economics

Author

Listed:
  • Małgorzata Burchard-Dziubińska

    (University of Lodz)

  • Elżbieta Antczak

    (University of Lodz)

  • Agnieszka Rzeńca

    (University of Lodz)

Abstract

Externalities take place when an economic operator does not experience all costs (in case of negative externalities) or benefits (in case of positive externalities) involved in his activities, which are passed on to other economic operators. Specific challenge to economists is posed by negative technological externalities, which have also triggered experimental research studies using the declared (stated) preference method. The aim of the experiment was to find the most preferred solution geared towards the elimination of the source of air pollution in a village and to learn about respondents’ willingness to pay (WTP) for the public good supplied as a result of such elimination. Out of the five proposed options, one of the most preferred by respondents was a voluntary fundraising initiative to collect money for the construction of the neighbour’s connection that would go on until they collect PLN 10 k but not longer than for a year. By using the WTP method, we arrived at an unambiguous valuation of the good expressed in terms of money. The most preferred tax rate revealed as a result of the survey suggests that the valuation of the public good was underestimated. As a result, the situation described in the case study cannot be resolved successfully.

Suggested Citation

  • Małgorzata Burchard-Dziubińska & Elżbieta Antczak & Agnieszka Rzeńca, 2020. "Declared Preference Method—Research Experiment Concerning Air Quality," Springer Proceedings in Business and Economics, in: Kesra Nermend & Małgorzata Łatuszyńska (ed.), Experimental and Quantitative Methods in Contemporary Economics, chapter 0, pages 365-379, Springer.
    • Handle: RePEc:spr:prbchp:978-3-030-30251-1_26
    DOI: 10.1007/978-3-030-30251-1_26
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