Willingness to Pay for Hosting Formula One

Abstract

Following Carson and Groves’s theoretical framework on incentive compatibility in stated preference surveys, we apply the contingent valuation method with a single-bounded dichotomous referendum-style choice question to estimate the willingness to pay to host a Formula One Grand Prix in Copenhagen, Denmark. Based on a sample of 2,268 respondents answering a web-based questionnaire distributed to a random sample of individuals living in Copenhagen through the Danish public digital post system, we find an annual aggregate welfare improvement in the range of €7.36–13.82 million among the 320,825 households in Copenhagen Municipality, with €9.70 million as our central estimate, not considering potential negative welfare changes from hosting.