Declared Preferences (DP) methods are an effective way to estimate the values associated with changes in welfare, according to a new research paper. The DP method is beneficial for estimating environmental values and can be applied to scenarios like a referendum on an environmental issue. The two most essential methods based on the DP hypothesis are the Contingent Valuation (CV) method and those based on a Choice Experiment (CE) approach. These methods present different hypothetical scenarios with various attributes, allowing researchers to determine participants’ preferences.
Water valuation is one example of how DP methods can be applied. The DP method allows researchers to estimate values associated with changes in welfare, making it possible to propose credible relative changes and answer questions about potential scenarios. Researchers should describe the change in a tailored and understandable language to the respondents, which includes baseline conditions and their changes. This allows for subjective perceptions to be considered and for applying a method based on the same hypothesis and linked to the scenario.
The selection of a random sample with a chosen population and a method with the fundamental environmental conditions is essential in applying an effective research method based on the DP. When it comes to choosing between CV and CE methods, there are different advantages and disadvantages. CV offers opportunities to estimate values when an element cannot be easily defined in attributes. At the same time, CE may disclose information regarding the value of individual attributes and their desire to modify some of them. The choice between the two should be based on the answers obtained, the objective decision being considered, and the type of information required.
Summary of: Water Valuation and the Application of Declared Preferences Method: Contingent Valuation vs a Choice Experiment Approach, by Óscar Alfranca
Link to the article: https://journals.modernsciences.org/index.php/msj/article/view/15
References
- Alfranca, Ó. (2022). Water Valuation and the Application of Declared Preferences Method: Contingent Valuation vs a Choice Experiment Approach. Modern Sciences Journal, 11(1). https://doi.org/10.57184/msj.v11i1.15
