The Use of Hypothetical Baselines in Stated Preference Surveys

Dale Whittington and Wiktor Adamowicz

RFF Working Paper Series from Resources for the Future

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.

Keywords: stated preference; environmental valuation; health valuation; contingent valuation; choice experiments; baseline; status quo (search for similar items in EconPapers)
JEL-codes: D61 Q51 Q56 (search for similar items in EconPapers)
Date: 2011-12-22
New Economics Papers: this item is included in nep-dcm and nep-env
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Citations: View citations in EconPapers (4)

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Working Paper: The Use of Hypothetical Baselines in Stated Preference Surveys (2010)
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