Valuing Environmental Amenities Using Stated Choice Studies: A Common Sense Approach to Theory and Practice (The Economics of Non-Market Goods and Resources, 8)

When I was a graduate student, I fell in love with choice models. After years studying the econometrics of the standard linear model, discrete choice offered so many new, cool twists. With contingent valuation (CV) studies abounding, data was plentiful and varied. Every CV dataset had its own kinks and quirks that begged to be addressed through innovative modeling techniques. Dissertation topics were not scarce. We economists like to assume. There are jokes written about this. My assumption, as I slaved over the statistical properties of the double-bounded CV model, was that CV data was good data, representing valid economic choices made by survey respondents. Before I received my Ph.D., this assumption was called into question big time. In 1989, the Exxon-Valdez oil tanker spilled 11 million gallons of oil into Prince William Sound, Alaska. The accident killed a lot of birds, devastated fisheries, harmed area economies and ruined a reputation or two. It also changed the field of environmental valuation. What was once a research field dominated by environmental economists interested in obtaining nonmarket values for environmental amenities was now a legal battleground pitting environmental economists against “traditional” economists who were skeptical of the techniques and procedures used with CV. If Nobel prizes are indicators of quality – and I’m fairly certain they are – the Exxon-Valdez oil spill drew the best and the brightest to scrutinize our field.

This book provides practical, research-based advice on how to conduct high-quality stated choice studies. It covers every aspect of the topic, from planning and writing the survey, to analyzing results, to evaluating quality. Chapters by highly-regarded academics and professionals are provided on rarely-discussed topics such as "supporting questions” and experimental design, as well as state-of-the-art multinomial choice modelling, attribute processing, the role of information, and lessons learned from the field of experimental economics. There is no other book on the market today that so thoroughly addresses the methodology of stated choice. Academics and practitioners in fields such as environmental, health and transportation economics, and marketing, will need this book on their shelves – and they will refer to it often.