IDEAS home Printed from https://ideas.repec.org/p/sss/wpaper/2017-02.html
   My bibliography  Save this paper

The External Validity of Consequential Stated Preference Studies: a comment

Author

Listed:
  • David A. Comerford

    (Division of Economics, University of Stirling)

  • Nick Hanley

    (School of Geography and Sustainable Development, University of St. Andrews)

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.

Suggested Citation

  • David A. Comerford & Nick Hanley, 2017. "The External Validity of Consequential Stated Preference Studies: a comment," Discussion Papers in Environment and Development Economics 2017-02, University of St. Andrews, School of Geography and Sustainable Development.
    • Handle: RePEc:sss:wpaper:2017-02
    as

    Download full text from publisher

    File URL: http://www.st-andrews.ac.uk/media/dept-of-geography-and-sustainable-development/pdf-s/DP%202017-02%20Comerford%20&%20Hanley.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    2. Amihai Glazer & Kai A. Konrad, 2008. "A Signaling Explanation for Charity," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 713-722, Springer.
    3. Poe, Gregory L. & Vossler, Christian A., 2009. "Consequentiality and contingent values: an emerging paradigm," MPRA Paper 38864, University Library of Munich, Germany.
    4. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
    5. Simona Botti & Ann L. McGill, 2006. "When Choosing Is Not Deciding: The Effect of Perceived Responsibility on Satisfaction," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 33(2), pages 211-219, July.
    6. Bruno S. Frey & Alois Stutzer, 2005. "Beyond outcomes: measuring procedural utility," Oxford Economic Papers, Oxford University Press, vol. 57(1), pages 90-111, January.
    7. Christian A. Vossler & Maurice Doyon & Daniel Rondeau, 2012. "Truth in Consequentiality: Theory and Field Evidence on Discrete Choice Experiments," American Economic Journal: Microeconomics, American Economic Association, vol. 4(4), pages 145-171, November.
    8. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    9. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, March.
    10. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2008. "How are preferences revealed?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1787-1794, August.
    11. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    12. Herriges, Joseph & Kling, Catherine & Liu, Chih-Chen & Tobias, Justin, 2010. "What are the consequences of consequentiality?," Journal of Environmental Economics and Management, Elsevier, vol. 59(1), pages 67-81, January.
    13. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    14. Crumpler, Heidi & Grossman, Philip J., 2008. "An experimental test of warm glow giving," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1011-1021, June.
    15. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    16. Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Alex Rees-Jones, 2014. "Can Marginal Rates of Substitution Be Inferred from Happiness Data? Evidence from Residency Choices," American Economic Review, American Economic Association, vol. 104(11), pages 3498-3528, November.
    17. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2008. "How are preferences revealed?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1787-1794, August.
    18. Richard T. Carson & Theodore Groves & John A. List, 2014. "Consequentiality: A Theoretical and Experimental Exploration of a Single Binary Choice," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 171-207.
    19. Rondeau, Daniel & Poe, Gregory L. & Schulze, William D., 2005. "VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms," Journal of Public Economics, Elsevier, vol. 89(8), pages 1581-1592, August.
    20. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    21. Lynch, John G, Jr, 1982. "On the External Validity of Experiments in Consumer Research," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(3), pages 225-239, December.
    22. Kahneman, Daniel & Ritov, Ilana, 1994. "Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 5-38, July.
    23. Riccardo Scarpa & Kenneth G. Willis & Melinda Acutt, 2007. "Valuing externalities from water supply: Status quo, choice complexity and individual random effects in panel kernel logit analysis of choice experiments," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 50(4), pages 449-466.
    24. Longo, Alberto & Markandya, Anil & Petrucci, Marta, 2008. "The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy," Ecological Economics, Elsevier, vol. 67(1), pages 140-152, August.
    25. Johansson,Per-Olov, 1993. "Cost-Benefit Analysis of Environmental Change," Cambridge Books, Cambridge University Press, number 9780521447928, January.
    26. Nunes, Paulo A. L. D. & Schokkaert, Erik, 2003. "Identifying the warm glow effect in contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 231-245, March.
    27. Jerry Hausman, 2012. "Contingent Valuation: From Dubious to Hopeless," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 43-56, Fall.
    28. David Reinstein & Joon Song, 2012. "Efficient Consumer Altruism and Fair Trade Products," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(1), pages 213-241, March.
    29. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Glenk, Klaus & Meyerhoff, Jürgen & Colombo, Sergio & Faccioli, Michela, 2024. "Enhancing the face validity of choice experiments: A simple diagnostic check," Ecological Economics, Elsevier, vol. 221(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haghani, Milad & Bliemer, Michiel C.J. & Rose, John M. & Oppewal, Harmen & Lancsar, Emily, 2021. "Hypothetical bias in stated choice experiments: Part II. Conceptualisation of external validity, sources and explanations of bias and effectiveness of mitigation methods," Journal of choice modelling, Elsevier, vol. 41(C).
    2. Zawojska, Ewa & Bartczak, Anna & Czajkowski, Mikołaj, 2019. "Disentangling the effects of policy and payment consequentiality and risk attitudes on stated preferences," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 63-84.
    3. Christian A. Vossler & Stéphane Bergeron & Maurice Doyon & Daniel Rondeau, 2023. "Revisiting the Gap between the Willingness to Pay and Willingness to Accept for Public Goods," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(2), pages 413-445.
    4. Daniel A. Brent & Lata Gangadharan & Anke D. Leroux & Paul A. Raschky, 2022. "Reducing bias in preference elicitation for environmental public goods," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(2), pages 280-308, April.
    5. Dardanoni, Valentino & Guerriero, Carla, 2021. "Young people' s willingness to pay for environmental protection," Ecological Economics, Elsevier, vol. 179(C).
    6. David A. Comerford & Leonhard K. Lades, 2022. "Responsibility utility and the difference between preference and desirance: implications for welfare evaluation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(2), pages 201-224, February.
    7. Xie, Lusi & Adamowicz, Wiktor & Kecinski, Maik & Fooks, Jacob R., 2022. "Using economic experiments to assess the validity of stated preference contingent behavior responses," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    8. Shr, Yau-Huo (Jimmy) & Zhang, Wendong, 2024. "Omitted downstream attributes and the benefits of nutrient reductions: Implications for choice experiments," Ecological Economics, Elsevier, vol. 222(C).
    9. van Hoorn, André, 2018. "Is the happiness approach to measuring preferences valid?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 53-65.
    10. Drichoutis, Andreas C. & Vassilopoulos, Achilleas & Lusk, Jayson L. & Nayga, Rodolfo M. Jr., 2015. "Reference dependence, consequentiality and social desirability in value elicitation: A study of fair labor labeling," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202705, European Association of Agricultural Economists.
    11. Bishop, Richard C., 2018. "Warm Glow, Good Feelings, and Contingent Valuation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    12. Richard C. Bishop & Kevin J. Boyle, 2021. "On Adding-Up as a Validity Criterion for Stated-Preference Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(3), pages 587-601, November.
    13. Lloyd-Smith, Patrick & Adamowicz, Wiktor, 2018. "Can stated measures of willingness-to-accept be valid? Evidence from laboratory experiments," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 133-149.
    14. Timothy C. Haab & Matthew G. Interis & Daniel R. Petrolia & John C. Whitehead, 2013. "From Hopeless to Curious? Thoughts on Hausman's 'Dubious to Hopeless' Critique of Contingent Valuation," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(4), pages 593-612.
    15. Drichoutis, Andreas C. & Vassilopoulos, Achilleas & Lusk, Jayson & Nayga, Rodolfo M., 2015. "Fair farming: Preferences for fair labor certification using four elicitation methods," MPRA Paper 62546, University Library of Munich, Germany.
    16. Richard C. Bishop & Kevin J. Boyle, 2019. "Reliability and Validity in Nonmarket Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 559-582, February.
    17. Zawojska, Ewa & Gastineau, Pascal & Mahieu, Pierre-Alexandre & Cheze, Benoit & Paris, Anthony, 2021. "Measuring policy consequentiality perceptions in stated preference surveys," 2021 Annual Meeting, August 1-3, Austin, Texas 313977, Agricultural and Applied Economics Association.
    18. Jie He & Jérôme Dupras & Thomas G. Poder, 2018. "Payment and Provision Consequentiality in Voluntary Contribution Mechanism: Single or Double “Knife-Edge” Evidence?," Cahiers de recherche 18-02, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    19. 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.
    20. Schläpfer, Felix & Getzner, Michael, 2020. "Beyond Current Guidelines: A Proposal for Bringing Behavioral Economics to the Design and Analysis of Stated Preference Surveys," Ecological Economics, Elsevier, vol. 176(C).

    More about this item

    Keywords

    Cost Benefit Analysis; Stated Preference; Willingness-to-pay; Consequentiality; Act utility; Exogenous Goods; Preferences-over-actions; Preferences-over-outcomes;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sss:wpaper:2017-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Laure Kuhfuss (email available below). General contact details of provider: https://edirc.repec.org/data/eestauk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.