Valuing education for limited-resource audiences using a willingness to accept experiment.

Abstract

Education grants often target audiences that have limited-resources relative to their peers, such as beginning farmers, who arguably have the most to gain from more education. Yet, charging even modest fees to these participants is discouraged, creating a challenge for funding entities that desire to have a dollar value for the education provided. To measure this value, we conducted an experiment using a willingness-to-accept (WTA) approach. Participants chose a minimum cash payout from seven different options to voluntarily leave a training session before receiving any instruction or educational materials. The design is constructed so that each option has an equal expected payout. Cash payouts were not advertised or known to any participants before the training. Results show that average WTA values are $277.44 per training (about 4 hours of instruction), which is 2.11 to 4.74 times more than participants' self-reported willingness to pay (WTP), depending on how travel costs and time of participants are valued. WTP consistently and significantly explains much of the variation in WTA. In sharp contrast, detailed travel cost estimates in various forms were consistently insignificant for explaining WTA values. Beginning farmers and ranchers, our targeted limited-resource audience, reported WTA and WTP values that were $81.18 and $22.73 more per training, respectively, than those of non-beginning farmers.