Assessing the extent of altruism in the valuation of community drinking water quality improvements

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Abstract

[1] Improvements in publically provided goods and services, like community drinking water treatment, have values to people arising from their self-interest, but may as well have value from their altruistic concerns. The extent to which the value is altruistic versus self-interested is an important empirical issue for policy analysis because the benefits to improving drinking water quality may be larger than previously thought. We conducted an internet survey across Canada to identify both self-interested willingness-to-pay and altruistic willingness-to-pay obtained through hypothetical responses to a series of stated choice tasks and actual self-protection data against health risks from tap water. We use the information on self-protection to identify altruistic WTP. We find significant differences between self-interested and altruistic WTP: the latter can be three times greater than the former. Whether benefits of water protection are actually larger, however, depends on whether the altruism is paternalistic or nonpaternalistic.

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