Free riding, contribution behavior, and public goods: the case of the Virginia nongame wildlife tax checkoff

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1990-07-23

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Virginia Tech

Abstract

This study examines the free rider effect and other voluntary contribution behavior in an actual public goods funding situation. Because the traditional neoclassical economic model of consumption behavior does not adequately explain behavior with respect to voluntary contribution to the funding of public goods. A model is developed that expands upon the traditional model and which incorporates several aspects of behavior. These aspects include strategic behavior such as strong and weak free riding, non-voting, and protest voting, as well as utility received from contributing.

Most studies of voluntary contribution behavior involve the use of hypothetical or contingent markets and use the traditional neoclassical model. Therefore, a study of contribution behavior that incorporates an expanded neoclassical model including factors such as contribution utility would be desirable in order to examine actual contribution behavior. To this end, a model is developed which explains the behavior of contributors and noncontributors to a tax checkoff program. The case study is the Virginia nongame wildlife tax checkoff for taxable year 1987. A survey was developed and administered to a random sample of Virginia taxpayers who were eligible to contribute to the program.

The survey results do not support the strong free rider hypothesis, although many people apparently contributed less than their total willingness to pay for nongame wildlife management or preservation. Non-voting behavior was not a significant factor, in contrast to protest voting, which was a significant reason for noncontribution. Many contributors indicated that they were receiving utility from giving to a perceived good cause rather than from nongame wildlife per se. Finally, other factors appeared to be important to the contribution decision, including the institutional setting in Virginia and assurance about the use of funds.

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