Optimal Decision Processes: On the Choice Between Environmental Valuation Methods
29 Pages Posted: 19 Jul 2007
Date Written: 2007
Decision-makers have a wide variety of competing and complementary methods for non-market valuation, but there is little formal advice on the choice of method. I offer a formal approach, using a loss function (the mean square error) to compare contingent valuation, Citizens' Jury and methods where by intention only a portion of total value is estimated, when a) preferences vary across the population and b) methods are more or less susceptible to framing effects. Illustrative simulations suggest conditions under which the Citizens' Jury may dominate contingent valuation when framing effects are significant.
Keywords: contingent valuation, optimal decisions, Citizens' Jury
JEL Classification: D61, H43, Q26
Suggested Citation: Suggested Citation