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The Use of Hypothetical Baselines in Stated Preference Surveys

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  • Whittington, Dale
  • Adamowicz, Wiktor

Abstract

Researchers using stated preference (SP) techniques have increasingly come to rely on what we call “hypothetical baselines.” By this we mean that respondents are provided with a description of a current state, or baseline, but that this baseline is intentionally not the actual state of environmental quality, health, or other condition. The researcher then poses a valuation question or choice task that is contingent, not on the existing status quo, but rather on the state of the world described in this new hypothetical baseline. In this paper, we argue that researchers using SP techniques have often used hypothetical baselines without carefully considering the cognitive challenges this poses for respondents or the difficulties this practice creates for advising policymakers. We present a simple typology of four types of SP studies, two of which rely on hypothetical baselines, and give six examples of conditions that an SP researcher may change to create a hypothetical baseline. We discuss four main reasons why SP analysts use hypothetical baselines in their research designs, plus some of the risks associated with the use of hypothetical baselines. Finally, we offer guidance for the use of hypothetical baselines in future SP surveys.

Suggested Citation

  • Whittington, Dale & Adamowicz, Wiktor, 2011. "The Use of Hypothetical Baselines in Stated Preference Surveys," Discussion Papers dp-11-11-efd, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-11-11-efd
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    File URL: http://www.rff.org/RFF/documents/EfD-DP-11-11.pdf
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    1. Workie, Lamesgin Tebeje, 2017. "Households’ Willingness To Pay For Soil Conservation Practices On Cultivated Land In South Achefer District, Amhara National Regional State Of Ethiopia: A Contingent Valuation Approach," Research Theses 276459, Collaborative Masters Program in Agricultural and Applied Economics.
    2. Jürgen Meyerhoff & Morten Mørkbak & Søren Olsen, 2014. "A Meta-study Investigating the Sources of Protest Behaviour in Stated Preference Surveys," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(1), pages 35-57, May.

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    More about this item

    Keywords

    stated preference; environmental valuation; health valuation; contingent valuation; choice experiments; baseline; status quo;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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