The External Validity of Consequential Stated Preference Studies: a comment

David A. Comerford () and Nick Hanley
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David A. Comerford: Division of Economics, University of Stirling

Discussion Papers in Environment and Development Economics from University of St. Andrews, School of Geography and Sustainable Development

Abstract: Mounting evidence suggests that Consequential Discrete Choice Experiments (CDCEs) are internally valid i.e. they elicit a de-facto revealed preference. This comment asks whether CDCEs are always externally valid. For instance, when it comes to existence values, policy makers require a valuation of the benefit that derives from passively experiencing the continued existence of a good, whereas CDCEs measure the value that derives from actively intervening to maintain or increase the supply of a good. We show that CDCEs will recommend suboptimal levels of Pigovian taxes and public goods provision. We suggest potential alternatives to CDCEs that future research should consider.

Keywords: Cost Benefit Analysis; Stated Preference; Willingness-to-pay; Consequentiality; Act utility; Exogenous Goods; Preferences-over-actions; Preferences-over-outcomes (search for similar items in EconPapers)
JEL-codes: B41 C83 D61 D62 H41 H43 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2017-02
New Economics Papers: this item is included in nep-dcm and nep-upt
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Citations: View citations in EconPapers (1)

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