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When is some number really better than no number? On the optimal choice between non-market valuation methods

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  • Munro, Alistair

Abstract

Decision-makers have a wide variety of competing and complementary methods for non-market valuation, but there is little formal advice on the choice of method. I offer a formal approach, using a loss function (the mean square error) to compare contingent valuation, Citizens'Jury and methods where by intention only a portion of total value is estimated, when a) preferences vary across the population and b) methods are more or less susceptible to framing effects. Illustrative simulations suggest con-ditions under which the Citizens'Jury may dominate contingent valuation when framing effects are significant.

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  • Munro, Alistair, 2007. "When is some number really better than no number? On the optimal choice between non-market valuation methods," MPRA Paper 8978, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8978
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    2. Dikgang, Johane & Muchapondwa, Edwin, 2012. "The valuation of biodiversity conservation by the South African Khomani San “bushmen” community," Ecological Economics, Elsevier, vol. 84(C), pages 7-14.

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    More about this item

    Keywords

    contingent valuation; Citizens' Jury; optimal decisions; framing effects; cost-benefit analysis;
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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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