Matching Grants and Public Goods: a Closed-Ended Contingent Valuation Experiment

Abstract

Matching grants are commonly used to influence the bundle of public goods provided by governments. A contingent valuation experiment was designed to determine the value that individuals place on improved recreational facilities under a matching grant proposal. The experiment provided an opportunity to examine preferences given the public good exists in an active and well-defined market, and the valuation experiment was perceived as meaningful to public policy. The researchers estimated 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 double the actual tax increase for the average property owner.