Question

A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. For the students of the college, the visual appearance of the campus is and . Thus, the visual appearance would be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $66,120. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 1,820 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $20. The benefit of the beautification initiative, as suggested by the survey, is - Because the estimated benefit is than the cost, the college administrators undertake the beautification initiative. The calculation of the benefit of the beautification initiative relied on the ability of the admanistrators to capture the true willingness to pay of each student accurately. Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that applys Students believe they will eventually be charged their willingness to pay. Students are surveyed at random, using conventional survey and data-gathening methods.

Answer 1

When conducting a survey to determine the willingness to pay for a campus beautification project, misleading data can result if students believe they will be charged the amount they report, or if the survey methods are biased.

Step-by-step explanation:

A local college is assessing whether to implement a campus beautification initiative and is evaluating students' willingness to pay for the project. Scenarios that can lead to misleading data on willingness to pay in a survey include if students believe they will be charged based on their stated willingness or if there is any potential bias in survey methods.

To accurately gauge the perceived benefit and thereby conduct a cost-benefit analysis, it's crucial that the data reflects the true value students place on the campus improvements without any external pressures or misconceptions.

For instance, if students think they will actually be charged the amount they report, they may underreport their true willingness to pay, skewing the results of the survey. Conversely, if students overestimate the benefits because they are not the ones bearing the direct cost, it could lead to an overvaluation of the project's perceived benefits.

Additionally, if the sample surveyed is not representative of the entire student body, the average willingness to pay may not accurately reflect the collective valuation of the student population.