Choice Modelling Approach: A Review

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Published Aug 24, 2021
Jasmeena Bashir Bisma Raina

Abstract

The main aim of this paper is to review the recent developments in the environmental
valuation methods and their methodological issues. Environmental valuation methods can be
categorized into revealed-preference methods, stated-preference methods and productionfunction approaches. Among the set of stated preference methods the Choice Experiments
(CES) is now widely applied to diverse environmental goods where market failure exists. This
method has found its success in resolving some methodological issues of Contingent
Valuation Method (CVM). Choice experiment is the method which has greatest number of
applications where people choose their most preferred alternative from a series of alternatives
by simply ranking and rating scales. The study concludes that despite many limitations or
methodological issues arising due to hypothetical nature of stated preference surveys, choice
experiment method can be successfully applied to a range of non-marketed goods with
certainty to measure consumer preferences.
References
Adamowicz, W., Louviere, J., & Swait, J. (1998). Introduction to Attribute-Based Stated
Choice Methods-Final Report. National Oceanic and Atmospheric Administration.
Adamowicz, Wiktor, Louviere, J., & Swait, J. (1998). Introduction to attribute-based stated
choice methods. NOAA-National Oceanic Athmospheric Administration, Washington, USA.
Bateman, I. J., Carson, R. T., Day, B., Hanemann, W. M., Hanley, N., Hett, T., Jones-Lee,
M., Loomes, G., Mourato, S., & Ozdemiroglu, E. (2003). Guidelines for the use of stated
preference techniques for the valuation of preferences for non-market goods. Edward Elgar,
Cheltenham.
Bateman, Ian J., Carson, R. T., Day, B., Hanemann, M., Hanley, N., Hett, T., Jones-Lee, M.,
Loomes, G., Mourato, S., & Pearce, D. W. (2002). Economic valuation with stated preference
techniques: A manual. Economic Valuation with Stated Preference
Choice Modelling Approach: A Review
Birol, E., & Koundouri, P. (2008). Choice experiments informing environmental policy: A
European perspective. Edward Elgar Publishing.
Blamey, R. K., Bennett, J. W., Louviere, J. J., Morrison, M. D., & Rolfe, J. C. (2002).
Attribute causality in environmental choice modelling. Environmental and Resource
Economics, 23(2), 167–186.
Flachaire, E., & Hollard, G. (2007). Starting point bias and respondent uncertainty in
dichotomous choice contingent valuation surveys. Resource and Energy Economics, 29(3),
183–194.
Green, P. E. (1995). The Role and Limitations of Conjoint Analysis in the Preference
Modeling of Constructed Markets. The Wharton School, University of Pennsylvania.
Hanley, N., Wright, R. E., & Adamowicz, V. (1998). Using choice experiments to value the
environment. Environmental and Resource Economics, 11(3–4), 413–428.
Hensher, D. A. (1994). Stated preference analysis of travel choices: The state of practice.
Transportation, 21(2), 107–133.
Hoyos, D. (2010). The state of the art of environmental valuation with discrete choice
experiments. Ecological Economics, 69(8), 1595–1603.
Katuwal, H. (2012). Demand for Water Quality: Empirical evidence from a knowledge,
attitude, behavior, and choice experiment survey about the Bagmati River in Kathmandu,
Nepal.
Ladenburg, J., & Olsen, S. B. (2006). Starting point anchoring effects in choice experiments.
Fødevareøkonomisk Institut.
Louviere, J. J. (2001). Choice experiments: An overview of concepts and issues. The Choice
Modelling Approach to Environmental Valuation, 13–36.
Martinsson, P., Carlsson, F., & Alpizar, F. (2001). Using choice experiments for non-market
valuation. Rapport Nr.: Working Papers in Economics, Nr, 52

How to Cite

Bashir, J., & Bisma Raina. (2021). Choice Modelling Approach: A Review. SPAST Abstracts, 1(01). Retrieved from https://spast.org/techrep/article/view/128
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Article Details

References
Adamowicz, W., Louviere, J., & Swait, J. (1998). Introduction to Attribute-Based Stated
Choice Methods-Final Report. National Oceanic and Atmospheric Administration.
Adamowicz, Wiktor, Louviere, J., & Swait, J. (1998). Introduction to attribute-based stated
choice methods. NOAA-National Oceanic Athmospheric Administration, Washington, USA.
Bateman, I. J., Carson, R. T., Day, B., Hanemann, W. M., Hanley, N., Hett, T., Jones-Lee,
M., Loomes, G., Mourato, S., & Ozdemiroglu, E. (2003). Guidelines for the use of stated
preference techniques for the valuation of preferences for non-market goods. Edward Elgar,
Cheltenham.
Bateman, Ian J., Carson, R. T., Day, B., Hanemann, M., Hanley, N., Hett, T., Jones-Lee, M.,
Loomes, G., Mourato, S., & Pearce, D. W. (2002). Economic valuation with stated preference
techniques: A manual. Economic Valuation with Stated Preference
Choice Modelling Approach: A Review
Birol, E., & Koundouri, P. (2008). Choice experiments informing environmental policy: A
European perspective. Edward Elgar Publishing.
Blamey, R. K., Bennett, J. W., Louviere, J. J., Morrison, M. D., & Rolfe, J. C. (2002).
Attribute causality in environmental choice modelling. Environmental and Resource
Economics, 23(2), 167–186.
Flachaire, E., & Hollard, G. (2007). Starting point bias and respondent uncertainty in
dichotomous choice contingent valuation surveys. Resource and Energy Economics, 29(3),
183–194.
Green, P. E. (1995). The Role and Limitations of Conjoint Analysis in the Preference
Modeling of Constructed Markets. The Wharton School, University of Pennsylvania.
Hanley, N., Wright, R. E., & Adamowicz, V. (1998). Using choice experiments to value the
environment. Environmental and Resource Economics, 11(3–4), 413–428.
Hensher, D. A. (1994). Stated preference analysis of travel choices: The state of practice.
Transportation, 21(2), 107–133.
Hoyos, D. (2010). The state of the art of environmental valuation with discrete choice
experiments. Ecological Economics, 69(8), 1595–1603.
Katuwal, H. (2012). Demand for Water Quality: Empirical evidence from a knowledge,
attitude, behavior, and choice experiment survey about the Bagmati River in Kathmandu,
Nepal.
Ladenburg, J., & Olsen, S. B. (2006). Starting point anchoring effects in choice experiments.
Fødevareøkonomisk Institut.
Louviere, J. J. (2001). Choice experiments: An overview of concepts and issues. The Choice
Modelling Approach to Environmental Valuation, 13–36.
Martinsson, P., Carlsson, F., & Alpizar, F. (2001). Using choice
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