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Revealed versus Stated Preferences: What Have We Learned About Valuation and Behavior?

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  • Anna Alberini

Abstract

In this article I review and discuss the use of stated and revealed preference methods in two contexts: the estimation of the value per statistical life (VSL) and the “energy efficiency gap,” namely the slow pace of adoption of energy efficient technologies, even when they make economic sense. I examine whether revealed preference and stated preference studies complement one another in answering basic valuation and policy questions. I conclude that stated preference methods can fill some of the gaps typical of revealed preference approaches. For example, in the VSL context, they can address risk latency, age, and health status questions, and reach populations that are typically not represented in labor markets. Even more important, in stated preference studies, risk attributes can be varied independently from one another across respondents, allowing the analyst to estimate the effect of each of them on the VSL. Stated preference methods also have the potential to explore aspects of energy efficiency decisions (including uncertainty in the energy savings or disruption in the home during renovations) that are not easily observed in revealed preference studies. Estimating discount rates (a key issue in energy efficiency decisions) poses challenges in both revealed and stated preference studies.

Suggested Citation

  • Anna Alberini, 2019. "Revealed versus Stated Preferences: What Have We Learned About Valuation and Behavior?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(2), pages 283-298.
    • Handle: RePEc:oup:renvpo:v:13:y:2019:i:2:p:283-298.
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    File URL: http://hdl.handle.net/10.1093/reep/rez010
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    Cited by:

    1. Diaz, Lina & Houser, Daniel & Ifcher, John & Zarghamee, Homa, 2023. "Estimating social preferences using stated satisfaction: Novel support for inequity aversion," European Economic Review, Elsevier, vol. 155(C).
    2. Jaithri Ananthapavan & Marj Moodie & Andrew J. Milat & Rob Carter, 2021. "Systematic Review to Update ‘Value of a Statistical Life’ Estimates for Australia," IJERPH, MDPI, vol. 18(11), pages 1-17, June.
    3. Amy W. Ando, 2022. "Equity and Cost-Effectiveness in Valuation and Action Planning to Preserve Biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(4), pages 999-1015, December.
    4. Kathleen Segerson & Catherine L. Kling & Nancy E. Bockstael, 2022. "Contributions of women at the intersection of agricultural economics and environmental and natural resource economics," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 38-53, March.
    5. Cropper, Maureen L. & Joiner, Emily & Krupnick, Alan, 2023. "Revisiting the Environmental Protection Agency's Value of a Statistical Life," RFF Working Paper Series 23-30, Resources for the Future.
    6. Simora, Michael & Frondel, Manuel & Vance, Colin, 2020. "Do financial incentives increase the acceptance of power lines? Evidence from Germany," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    7. Zhang, Nan & Mendelsohn, Robert & Shaw, Daigee, 2023. "How to Identify and Estimate the Demand for Job Safety?," MPRA Paper 118594, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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