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Testing preference formation in learning design contingent valuation (LDCV) using advanced information and repetitivetreatments

Author

Listed:
  • Aravena, Claudia

    (Queen's University Belfast)

  • Hutchinson, W. George

    (Queen's University Belfast)

  • Carlsson, Fredrik

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Matthews, David I

    (Queen's University Belfast)

Abstract

Policymakers have largely replaced Single Bounded Discrete Choice (SBDC) valuation by the more statistically efficient repetitive methods; Double Bounded Discrete Choice (DBDC) and Discrete Choice Experiments (DCE). Repetitive valuation permits classification into rational preferences: (i) a-priori well-formed; (ii) consistent non-arbitrary values “discovered” through repetition and experience; (Plott, 1996; List 2003) and irrational preferences; (iii) consistent but arbitrary values as “shaped” by preceding bid level (Tufano, 2010; Ariely et al., 2003) and (iv) inconsistent and arbitrary values. Policy valuations should demonstrate behaviorally rational preferences. We outline novel methods for testing this in DBDC applied to renewable energy premiums in Chile.

Suggested Citation

  • Aravena, Claudia & Hutchinson, W. George & Carlsson, Fredrik & Matthews, David I, 2015. "Testing preference formation in learning design contingent valuation (LDCV) using advanced information and repetitivetreatments," Working Papers in Economics 619, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0619
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    File URL: https://gupea.ub.gu.se/handle/2077/38652
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    More about this item

    Keywords

    Contingent valuation; double bounded discrete choice; repetitive learning; advanced information learning; bid dependency; theories of preference formation;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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