DOES BETTER INFORMATION ABOUT THE GOOD AVOID THE EMBEDDING EFFECT

In contingent valuation, embedding refers to the solicitation of willi ngness to pay for a good that is valued as a component of a larger goo d. This study addressed one of the criticisms of previous embedding st udies, that the good was inadequately described to respondents. We tes ted for the effect of embedding on willingness to pay for natural area protection under three information levels, and found that amount of i nformation had little impact on the effect of embedding on willingness to pay-under all three information conditions, embedding significantl y lowered willingness to pay. If this and other embedding studies can be interpreted as indicating that many people consider related public goods to be close substitutes, then embedding studies demonstrate the considerable sensitivity of respondents to information about substitut es. Successful use of contingent valuation to value public goods relie s on agreement about how to present information about substitutes.