Determining the Extent of Market and Extent of Resource for Stated Preference Survey Design Using Mapping Methods

Abstract

Determining the appropriate survey population and the commodity to be valued are among the most fundamental design decisions for stated preference (SP) surveys. However, often little information is available about who in the population holds measurable value for the resource (the extent of the market) and their perceptions regarding the scope of the resource to be valued (the extent of the resource). In this paper, we present a novel approach using cognitive mapping interview techniques to shed light on these design questions. The method also provides ancillary information that assists in the interpretation of information collected during focus groups and through SP survey administration. The approach was developed and tested as part of an ongoing study on environmental degradation associated with acidification in the Southern Appalachian Mountain region. Although damage from acidification in the study region is broad, it is not clear whether residents of this region care, in both a use and nonuse sense, about resources in their states of residence, in neighboring states, on public lands, or more broadly across the region. From a pilot study, we found that participants show a significant home-state preference in the number and size of natural areas that they value within the larger Southern Appalachian Mountain region. However, this preference is not strong enough to suggest that the market for improving these resources is solely constrained to residents of the state in which the resource is located.

Keywords: stated preference, cognitive mapping, extent of market, extent of resource, definition of commodity

JEL Classification: Q26, Q51