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The External Validity of Consequential Stated Preference Studies: a comment

Author

Listed:
  • David A. Comerford

    (Division of Economics, University of Stirling)

  • Nick Hanley

    (School of Geography and Sustainable Development, University of St. Andrews)

Abstract

Mounting evidence suggests that Consequential Discrete Choice Experiments (CDCEs) are internally valid i.e. they elicit a de-facto revealed preference. This comment asks whether CDCEs are always externally valid. For instance, when it comes to existence values, policy makers require a valuation of the benefit that derives from passively experiencing the continued existence of a good, whereas CDCEs measure the value that derives from actively intervening to maintain or increase the supply of a good. We show that CDCEs will recommend suboptimal levels of Pigovian taxes and public goods provision. We suggest potential alternatives to CDCEs that future research should consider.

Suggested Citation

  • David A. Comerford & Nick Hanley, 2017. "The External Validity of Consequential Stated Preference Studies: a comment," Discussion Papers in Environment and Development Economics 2017-02, University of St. Andrews, School of Geography and Sustainable Development.
    • Handle: RePEc:sss:wpaper:2017-02
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    More about this item

    Keywords

    Cost Benefit Analysis; Stated Preference; Willingness-to-pay; Consequentiality; Act utility; Exogenous Goods; Preferences-over-actions; Preferences-over-outcomes;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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