Environmental and Resource Economics

, Volume 32, Issue 1, pp 55–89 | Cite as

Preference Anomalies, Preference Elicitation and the Discovered Preference Hypothesis

Article

Abstract

There is wide-ranging evidence, much of it deriving from economics experiments, of ‘anomalies’ in behaviour that challenge standard preference theories. This paper explores the implications of these anomalies for preference elicitation methods. Because methods that are used to inform public policy, such as contingent valuation, are based on standard preference theories, their validity may be called into question by the anomaly data. However, on a new interpretation, these anomalies do not contradict standard theory but are errors in stated preference that can be expected to disappear as people become more experienced in relevant decision environments. We explore the evidence for this interpretation and what implications follow for preference elicitation methodology.

Key words

contingent valuation experiments learning preference elicitation preference theory 

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Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.School of EconomicsUniversity of NottinghamNottinghamUK

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