Trust, corruption, and willingness to pay for improved environmental goods: An experimental analysis from a developing country

Abstract

AbstractObjectiveThe objective of this study was to determine whether the type of provider institution affects the Willingness to Pay (WTP) of a population for an urban regeneration project.MethodsThis research conducts a discrete choice experiment under a split‐sample approach, conducting two types of surveys, with the only variation being the administering institution for the funds.ResultsThe main findings indicate a significant difference in WTP between the sample associated with international non‐governmental organization (NGO) and the municipal sample. For example, the WTP of the population when the provider institution is an international NGO is almost six times higher than when the administering institution is the municipality, which is related to green spaces. The findings suggest that WTP may be underestimated because of the low levels of trust in local public institutions.ConclusionThe findings of this study have significant implications for economic valuation and public‐policy development. Future research aiming to estimate WTP for environmental goods and services must carefully consider the choice of administering institutions. The sensitivity of WTP to the institutional context, particularly in developing countries, highlights the need for thorough discussions in focus groups and validation through pilot surveys.