Demand for an Environmental Public Good in the Time of COVID-19: A Statewide Water Quality Referendum

s1.sIntroductionsThe impact of COVID-19 on markets has been large. Lost household income and increased uncertainty have caused the demand for many private goods (airline flights, restaurant visits, and haircuts) to drop, often precipitously. At the same time, the demand for other goods and services (hand sanitation products, video conferencing services, and food delivery) has increased significantly. Little has been reported, however, about the pandemic’s effect on the demand for public goods. The expected effects are not obvious. Consider the demand for water quality improvement, which we do in this article. Lost income, economic uncertainty, and priorities perhaps shifting to other public expenditures (such as health care) suggest that demand may decrease. On the other hand, increased participation in outdoor recreation activities,s1swhich are permitted (and even encouraged) for safety reasons, and a general expectation that governments do more for people in the time of trouble suggests the demand may increase.sUsing a stated preference referendum-style valuation survey, we consider how the demand for water quality improvements in the state of Delaware was influenced by the pandemic. Our analysis is particularly germane in that the Delaware legislature was considering a clean water bill at the time. Our referendum was designed to mimic that legislation without sacrificing the basic requirements for a good stated preference survey.sWater quality has been a longstanding issue in Delaware due to agricultural runoff in the south and industrial loads in the north. Delaware frequently ranks near the bottom among states in terms of water quality and meeting federal standards.s2sWater quality matters for drinking, withdrawal uses (agricultural and industrial), recreation, and ecosystems. Previous attempts to pass a water tax on households to fund clean-ups have failed, and so in early 2020, the Governor and legislature announced a new plan to raise funds directly...