Distributional preferences in contingent valuation surveys

In an original extension of contingent valuation methodology (CVM), support for a proposed environmental regulation is examined under three alternative polluter-pay specifications. Using a statewide random telephone sample of Washington State's electorate, one scenario asks respondents for their support absent any CV price and absent any information regarding what producers will pay. A second scenario asks willingness to pay (WTP) providing only a CV price but no polluter-pay information. A third scenario asks respondents for their support giving both a CV price and a percentage of total costs producers will pay. Extending the CV methodology, this percentage varies randomly between respondents. Absent any price or firm cost sharing information, some respondents assume producers are absorbing the costs. Providing a CV price reverses this assumption, and reduces support even after controlling for price. When the CV price is given along with the percentage, WTP increases the larger the percentage. Within each scenario support also varies according to whether the type of industry being regulated is small and competitive, or monopolistic.