Two neighbors are considering buying a street light. It costs $100 to install. Alice values the light at $70. Bart values it at $60. If they rely solely on the marketplace to make this decision and do not act together, neither will buy the lamp. However, it is clear that both would be better off if they acted together to make the purchase and split the cost. This street light is a public good—a...

a r t i c l e i n f o Absent or weak income effects reported in many contingent valuation studies have cast doubt on the reliability of the survey method. We find that the income effect depends on the type of public good in question: there is a negative income effect for willingness to pay for recycling, which requires time and effort for sorting, but a positive effect for the more convenient i...

Section 1115 of the Social Security Act allows the U.S. Department of Health and Human Services and states to test innovations in Medicaid and other public welfare programs without formal legislative action. Six states currently operate their Medicaid expansions as demonstrations and several more are expected to seek permission to do so. While the current Medicaid expansion demonstrations vary,...

Cooperation in biological, social, and economic groups is underpinned by public goods that are generated by group members at some personal cost. Theory predicts that public goods will be exploited by cheaters who benefit from the goods by not paying for them, thereby leading to the collapse of cooperation. This situation, described as the "public goods dilemma" in game theory, makes the ubiquit...

Increasingly, financial incentives are being used in health care as a result of increasing demand for health care coupled with fiscal pressures. Financial incentive schemes are one approach by which the system may incentivize providers of health care to improve productivity and/or adapt to better quality provision. Pay for performance (P4P) is an example of a financial incentive which seeks to ...

a r t i c l e i n f o It is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost–benefit analysis (CBA). However, CBA is not value-free. When used to measure welfare, it is based on highly controversial value judgements. When used to measure efficiency, it is based on assumptions of limited relevance to democratic decision-making ...