Environmental and Resource Economics

, Volume 11, Issue 3–4, pp 413–428 | Cite as

Using Choice Experiments to Value the Environment

  • Nick Hanley
  • Robert E. Wright
  • Vic Adamowicz

Abstract

This paper we outline the “choice experiment” approach to environmental valuation. This approach has its roots in Lancaster's characteristics theory of value, in random utility theory and in experimental design. We show how marginal values for the attributes of environmental assets, such as forests and rivers, can be estimated from pair-wise choices, as well as the value of the environmental asset as a whole. These choice pairs are designed so as to allow efficient statistical estimation of the underlying utility function, and to minimise required sample size. Choice experiments have important advantages over other environmental valuation methods, such as contingent valuation and travel cost-type models, although many design issues remain unresolved. Applications to environmental issues have so far been relatively limited. We illustrate the use of choice experiments with reference to a recent UK study on public preferences for alternative forest landscapes. This study allows us to perform a convergent validity test on the choice experiment estimates of willingness to pay.

choice experiments cost-benefit analysis environmental valuation forest landscapes stated preference models 

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Copyright information

© Kluwer Academic Publishers 1998

Authors and Affiliations

  • Nick Hanley
    • 1
  • Robert E. Wright
    • 2
  • Vic Adamowicz
    • 3
  1. 1.Institute of Ecology and Resource ManagementUniversity of Edinburgh, Kings BuildingsEdinburghScotland
  2. 2.Economics DepartmentUniversity of StirlingScotland
  3. 3.Department of Rural EconomyUniversity of AlbertaCanada

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