‘Contingent valuation’ methods are used to generate demand data, usually from household surveys, when real markets do not supply reliable revealed preference data about demands for certain types of goods. A number of significant lawsuits have promoted their use in estimating demand for environmental goods. They are also used by transportation economists, health economists and market researchers. Although the degree of acceptance of these methods varies, many economists agree that a value based on stated preferences derived from carefully conceived and executed research is almost certainly preferable to no number at all.
KeywordsConjoint analysis Construct validity assessments Contingent valuation Discrete- choice models Dummy variables Environmental economics Expectations Health economics Household surveys Indirect utility functions Logit models Marginal utility of income Maximum likelihood Neuroeconomics Probit models Random utility models Revealed preference Scope tests Stated preference Willingness to pay
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