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Stated Preference valuation methods: an evolving tool for understanding choices and informing policy

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  • Nick Hanley

    () (University of St Andrews, School of Geography and Geosciences)

  • Mikołaj Czajkowski

    () (Faculty of Economic Sciences, University of Warsaw)

Abstract

We examine the value of Stated Preference (SP) valuation methods as part of the environmental economist’s toolbox. We review a number of policy design issues where we believe SP methods have advantages over alternative approaches. We also discuss the role of SP methods in exploring a few aspects of peoples’ preferences and values which have wider implications for economics and behavioral sciences: (a) the effects of information, learning and knowledge; (b) testing the standard model of compensatory, rational choice; (c) the influence of behavioural levers such as social norms; and (d) the role of “deep” drivers of preference heterogeneity, such as personality and emotions. We also review what is known about the extent to which hypothetical choices reveal something about people’s true preferences. Finally, we speculate on some areas where SP methods may be useful in the future.

Suggested Citation

  • Nick Hanley & Mikołaj Czajkowski, 2017. "Stated Preference valuation methods: an evolving tool for understanding choices and informing policy," Working Papers 2017-01, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2017-01
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    File URL: http://www.wne.uw.edu.pl/index.php/download_file/3289/
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    References listed on IDEAS

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    Cited by:

    1. Boyce, Christopher & Czajkowski, Mikołaj & Hanley, Nick, 2019. "Personality and economic choices," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 82-100.
    2. Aleksandra Wiśniewska & Wiktor Budziński & Mikołaj Czajkowski, 2018. "Publicly funded cultural institutions – a comparative economic valuation study," Working Papers 2018-22, Faculty of Economic Sciences, University of Warsaw.
    3. Michela Faccioli & Mikołaj Czajkowski & Klaus Glenk & Julia Martin-Ortega, 2018. "Environmental attitudes and place identity as simultaneous determinants of preferences for environmental goods," Working Papers 2018-08, Faculty of Economic Sciences, University of Warsaw.
    4. Czajkowski, Mikołaj & Budziński, Wiktor, 2019. "Simulation error in maximum likelihood estimation of discrete choice models," Journal of choice modelling, Elsevier, vol. 31(C), pages 73-85.
    5. Mikołaj Czajkowski & Tomasz Gajderowicz & Marek Giergiczny & Gabriela Grotkowska & Urszula Sztandar-Sztanderska, 2017. "Choosing the future: economic preferences for higher education using discrete choice experiment method," Working Papers 2017-16, Faculty of Economic Sciences, University of Warsaw.

    More about this item

    Keywords

    stated preferences; non-market valuation; environmental economics methods; information; choice; social norms; preference heterogeneity;

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • D6 - Microeconomics - - Welfare Economics
    • H4 - Public Economics - - Publicly Provided Goods

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