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.
An earlier version of this paper was presented at the Southern Economic Association Annual Meeting. Orlando, Florida, November 1989.
This working paper was published as Combs, J. Paul, Rickey C. Kirkpatrick, Jason F. Shogren and Joseph A. Herriges, "Matching Grants and Public Good: a Closed-Ended Contingent Valuation Experiment," Public Finance Review 21 (1993): 178–195, doi:10.1177/109114219302100204.
Combs, J. Paul; Kirkpatrick, Rickey C.; Shogren, Jason F.; and Herriges, Joseph A., "Matching Grants and Public Goods: A Closed-Ended Contingent Valuation Experiment" (1992). CARD Working Papers. 142.