### Economic Valuation With Stated Preference Techniques: A Manual

Ian J. Bateman University of East Anglia

Richard T. Carson University of California, San Diego

Brett Day University of East Anglia

W. Michael Hanemann University of California, Berkeley

Nick Hanley University of Glasgow

Tanis Hett Economics for the Environment Consultancy, Ltd.

Michael Jones Lee University of Newcastle

Graham Loomes University of East Anglia

Susana Mourato Imperial College

Ece Özdemiroglu
Economics for the Environment Consultancy, Ltd.

David W. Pearce University College, London

Edward Elgar

2002Table of Contents

List of Figures

List of Tables

List of Boxes

The Authors List of Acronyms

Forward

INTRODUCTION Purpose of this manual Justification for assigning econo mic values to non-market effects A guide to the manual

Part I: CONCEPTS

1. The foundations of economic valuation

1.1 The uses of economic valuation

1.2 The nature of economic valuation and economic efficiency

1.3 Economic valuation and other values

1.4 Economic valuation when there are no markets

1.5 Economic valuation and the demand curve

1.6 Willingness to pay and willingness to accept

1.7 Total economic value and aggregation

1.8 Stated preferences and pubic participation

ANNEX 1.1 Benefit transfer and stated preference techniques ANNEX 1.2 Use of stated preference in UK environmental policy: the case of aggregates levy ANNEX 1.3 Discounting

2. Commissioning a stated preference study 2.1 Defining the context 2.2 Is economic valuation necessary and credible? 2.3 Choosing between economic valuation techniques 2.4 Commissioning a valuation study: a checklist 2.5 A typical work plan for a stated preference study

PART II. STATED PREFERENCE TECHNIQUES

3. population, sample and survey mode 3.1 Defining the target population 3.2 The need for and the importance of sampling 3.3 The sampling frame 3.4 Choosing the sample 3.5 Choosing the sampling mode3.6 Choosing the sample size 4. Designing a contingent valuation questionnaire 4.1 Useful lessons from other disciplines 4.2 The stages of designing a contingent valuation questionnaire 4.3 Pre-testing 4.4 The main survey ANNEX 4.1 Writing survey questions 5. Analysis of contingent valuation data 5.1 Contingent valuation datasets 5.2 Specification of the bid function 5.3 Estimating mean and median WTP 5.4 Models for testing the validity of WTP values

5.5 Models for benefit transfer exercises

5.6 Conclusions

ANNEX 5.1 Econometric estima tion of the bid function ANNEX 5.2 Estimating mean and median WTP 6. Designing a choice modeling questionnaire 6.1 What is choice modeling? 6.2 Main choice modeling approaches 6.3 Common design stages 6.4 Advantages and disadvantages of choice modeling relative to other economic valuation techniques 7. Analysis of choice modeling data 7.1 Choice experiments 7.2 Contingent ranking 7.3 Contingent rating 7.4 Paired comparison 8. Validity and reliability 8.1 Preferences, values and validity 8.2 Responses to survey que stions: some basic issues 8.3 Value types and their consistency 8.4 Overview of the validity problem and types of validity testing 8.5 Content validity 8.6 Construct validity 8.7 Reliability 8.8 Summary of factors relevant to de termining validity and reliability 9. Aggregation 9.1 Conditions for valid aggregation 9.2 Aggregation approaches 10. Reporting 10.1 Objectives 10.2 Methodology

10.3 Literature review 10.4 Population and sampling strategy 10.5 Questionnaire design and implementation

10.6 Results10.7 Validity testing 10.8 Aggregation and implications

10.9 Annexes

PART III. FURTHER ISSUES

11. Combining revealed and stated preference techniques 11.1 Why combine revealed and stated preference data 11.2 Random utility models combining st ated and revealed preference data 11.3 Contingent behavior panel data models of price changes 11.4 Contingent behaviour models of environmental quality changes

11.5 Conclusions 12. Cautions, caveats and future directions 12.1 The standard neo-classical model of preferences 12.2 Elicitation and response mode effects 12.3 The disparity between WTP and WTA 12.4 Scope, embedding and sequence effects 12.5 ‘Other-regarding’ issues : altruism and reciprocity

12.6 Conclusions

Bibliography Glossary

IndexThis book is available from

Edward Elgar http://www.e-elgar.com/Bookentry_Main.lasso?id=2639

Amazon http://www.amazon.com/Valuation-P reference-Techniques-AssociationDepartment/dp/1843768526/ref=sr_1_7?i e=UTF8&s=books&qid=1201671156&sr=8

-7

Barnes and Noble http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?z=y&EAN=9781840

649192&itm=4

BOOKSAMILLION.COM http://www.booksamillion.com/ncom/books?id=4016713185535&isbn=1843768526