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

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Abstract
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.

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