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Economic Valuation by the Method of Paired Comparison, with Emphasis on Evaluation of the Transitivity Axiom

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  • George L. Peterson
  • Thomas C. Brown

Abstract

The paired comparison (PC) method is used to investigate reliability, transitivity, and decision time for binary choices among goods and sums of money. The PC method reveals inconsistent choices and yields individual preference order over the set of items being compared. The data reported support the transitivity assumption and demonstrate high reliability for individual preference order. The paper also discusses using the PC method to obtain conservative median and mean estimates of willingness to accept compensation for public and private goods. The PC method may prove useful for valuing public goods, and warrants further study.

Suggested Citation

  • George L. Peterson & Thomas C. Brown, 1998. "Economic Valuation by the Method of Paired Comparison, with Emphasis on Evaluation of the Transitivity Axiom," Land Economics, University of Wisconsin Press, vol. 74(2), pages 240-261.
  • Handle: RePEc:uwp:landec:v:74:y:1998:i:2:p:240-261
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    Citations

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    Cited by:

    1. Kannika Thampanishvong, 2013. "Determinants of Flash Flood Evacuation Choices and Assessment of Preferences for Flash Flood Warning Channels: The Case of Thailand," EEPSEA Research Report rr2013034, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2013.
    2. Chilton, Susan M. & Burgess, Diane & Hutchinson, W. George, 2006. "The relative value of farm animal welfare," Ecological Economics, Elsevier, vol. 59(3), pages 353-363, September.
    3. Aric P. Shafran, 2014. "Equivalent Option Price With Supply Uncertainty," Bulletin of Economic Research, Wiley Blackwell, vol. 66(S1), pages 1-16, December.
    4. Gregory, Robin & Wellman, Katharine, 2001. "Bringing stakeholder values into environmental policy choices: a community-based estuary case study," Ecological Economics, Elsevier, vol. 39(1), pages 37-52, October.
    5. Kjartan Sælensminde, 2001. "Inconsistent choices in Stated Choice data;Use of the logit scaling approach to handle resulting variance increases," Transportation, Springer, vol. 28(3), pages 269-296, August.
    6. Schlapfer, Felix, 2006. "Survey protocol and income effects in the contingent valuation of public goods: A meta-analysis," Ecological Economics, Elsevier, vol. 57(3), pages 415-429, May.
    7. Rosenberger, Randall S. & Peterson, George L. & Clarke, Andrea & Brown, Thomas C., 2003. "Measuring dispositions for lexicographic preferences of environmental goods: integrating economics, psychology and ethics," Ecological Economics, Elsevier, vol. 44(1), pages 63-76, February.
    8. Rosenberger, Randall S. & Peterson, George L. & Loomis, John B., 2002. "Applying A Method Of Paired Comparisons To Measure Economic Values For Multiple Goods Sets," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), April.
    9. Strager, Michael P. & Rosenberger, Randall S., 2006. "Incorporating stakeholder preferences for land conservation: Weights and measures in spatial MCA," Ecological Economics, Elsevier, vol. 57(4), pages 627-639, June.
    10. Konrad Kułakowski, 2015. "A heuristic rating estimation algorithm for the pairwise comparisons method," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(1), pages 187-203, March.
    11. Strager, Michael P. & Rosenberger, Randall S., 2006. "Incorporating stakeholder preferences for land conservation: Weights and measures in spatial MCA," Ecological Economics, Elsevier, vol. 58(1), pages 79-92, June.
    12. Carol Mansfield & George L. Van Houtven & Joel Huber, 2002. "Compensating for Public Harms: Why Public Goods Are Preferred to Money," Land Economics, University of Wisconsin Press, vol. 78(3), pages 368-389.
    13. Brown, Thomas C. & Nannini, Dawn & Gorter, Robert B. & Bell, Paul A. & Peterson, George L., 2002. "Judged seriousness of environmental losses: reliability and cause of loss," Ecological Economics, Elsevier, vol. 42(3), pages 479-491, September.
    14. Konrad Kułakowski & Katarzyna Grobler-Dębska & Jarosław Wąs, 2015. "Heuristic rating estimation: geometric approach," Journal of Global Optimization, Springer, vol. 62(3), pages 529-543, July.
    15. Arvin B. Vista & Randall S. Rosenberger & Alan R. Collins, 2009. "If You Provide It, Will They Read It? Response Time Effects in a Choice Experiment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(3), pages 365-377, September.
    16. Pradiptyo, Rimawan & Sahadewo, Gumilang Aryo, 2012. "On The Complexity of Eliminating Fuel Subsidy in Indonesia; A Behavioral Approach," MPRA Paper 40045, University Library of Munich, Germany.
    17. Brown, Thomas C. & Kingsley, David & Peterson, George L. & Flores, Nicholas E. & Clarke, Andrea & Birjulin, Andrej, 2008. "Reliability of individual valuations of public and private goods: Choice consistency, response time, and preference refinement," Journal of Public Economics, Elsevier, vol. 92(7), pages 1595-1606, July.

    More about this item

    JEL classification:

    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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