Method Factsheet - Stated Preference Valuation Methods

Stated preference valuation is family of techniques which use individual respondents' statements about their preferences to estimate change in utility associated with a proposed increase in quality or quantity of an ecosystem service or bundle of services. Respondents are presented with one or more hypothetical policy or project scenarios that lead to a specified environmental change compared to a baseline situation. The answers respondents give, in the form of monetary amounts, ratings, or other indications of preference, are scaled following an appropriate model of preferences to yield a measure of value of the proposed ecosystem service change.

Constraints

Information problems - making it clear which individual or combinations of ecosystems services are included in valuation scenarios.
Respondents unwillingness to accept trade-offs between ecosystem services and money (e.g. for moral, or cultural reasons)
Rational choice assumptions and biases - there are a range of potential biases in people's willingness to pay, e.g. their context or role, the prices stated, the order in which parts of ecosystems are valued etc.

Product requirements

Requires new valuation data, e.g. based on surveys
Requires working with multidisciplinary researchers and stakeholders
Licensed software packages and ability to manipulate software required

Advantages

Recognised and established approach within environmental economics
Covers a wide range of ES use and non-use values
Trade-offs between ES and a few other context characteristics can be evaluated using choice experiments

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