In the Argo Dam study, about 62% of the survey population preferred to take down the dam, while 31% preferred to keep it, and 7% expressed no preference. For those who preferred keeping the dam, the estimated willingness to pay to keep it was $161/adult; those who wanted the dam removed would pay an estimated $135/adult to have it taken down. Ann Arbor has about 96,000 people.
(a) Democracy is based on each person having one vote. If there were a vote in Ann Arbor on dam removal, what is the likely outcome if a representative fraction of the population votes?
(b) If willingness to pay is a measure of how strongly people care about an issue, which group felt more strongly about whether to remove Argo Dam, those who wanted to keep the dam or those who wanted to remove it? Who would be more likely to show up to vote?
(c) Use the above values to estimate whether the aggregate willingness to pay for keeping the dam was larger or smaller than the aggregate willingness to pay for removing the dam. Would this calculation produce a recommendation different than the outcomes in (a) or (b)? If so, what are some advantages and disadvantages of a decision based on (i) seeking high voter turnout from a representative share of the population, (ii) those who feel most passionate encouraging those who think like them to vote, or (iii) having the city council decide based on an analysis of whether net benefits are larger for keeping or removing the dam?