A Comparison of Stated Preference Techniques for Estimating Environmental Values

The use of stated preference (SP) techniques for estimating environmental values has increased substantially in recent years. However, criticism about the most widespread SP technique used for valuing environmental resources, the contingent valuation method (CVM), suggests that there is a need to not only refine the CVM, but to develop alternative SP techniques. In this paper the CVM is compared with four other SP techniques: contingent rating, contingent ranking, paired comparison and choice modelling. The techniques are compared in terms of their methodologies and the validity and reliability of the results they produce. The appropriateness of using each of the SP techniques in different environmental valuation applications is also discussed. It was concluded that while the CVM is prone to bias and has some practical limitations, when applied appropriately it can be used to produce theoretically valid results. Three of the other techniques- contingent rating, contingent raking, and paired comparison- are found to have weak theoretical bases and do not produce economically valid valuation estimates. The final SP technique examined, choice modelling, appears to have considerable potential for providing useful and valid estimates of environmental values.