(Non-market) Valuation methods – Stated preference

[SOURCE: Glanz A and Knapp M (2017) Understanding substantive and theoretical issues in long-term care. Glossary of key terms. From: Social Protection Investment in Long-Term Care Project, HORIZON 2020 - Grant Agreement No 649565. European Union. (The resource is accessible here)]

Stated preference approaches ask people to ‘state their preference’ directly for a good or service using questionnaire surveys. Two methods are commonly used in non-market valuations: contingent valuation and discrete choice experiments (DCE).  For example, contingent valuation surveys ask respondents the equivalent value through their willingness to pay for a good or service, or their willingness to accept as a compensating value for its loss (Fujiwara and Campbell 2011). As the name suggests, contingent valuations are contingent on specific characteristics. For example, this could include the willingness to pay for a specific increase in personal health or an improved local ecosystem, or conversely the willingness to accept a reduction in health or the damaged local ecosystem.

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