Effects of Perceived Fairness on Willingness to Pay

Abstract

An experiment tested the effects of fairness on willingness to pay (WTP) for public goods. Treatments varied the amount requested (high vs. low), the fairness of the requested contribution (high vs. low), and the beneficiary (self vs. other) or cause of the needed change (internal vs. external). Irrespective of fairness type (beneficiary or cause), under conditions of high fairness, the public good was judged to be more valuable and the requested contribution more justified. The judged value of the public good and the perceived fairness of the requested contribution each made a significant contribution to the prediction of WTP. The requested amount influenced WTP by acting as an initial anchor. The implications of these findings for contingent valuation are discussed.

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