ABSTRACT
Stated preference methods such as contingent valuation and conjoint analysis have become standard tools for economic and public policy analysis. In cases where policy makers are interested in estimating the value of non-market goods or those with passive use values, stated preference methods are sometimes the only tools available. The validity of stated preference methods has been debated for several decades in the contingent valuation literature. While not all researchers agree, the general consensus is that most of the arguments against stated preference methods can be avoided by careful design and implementation (see Carson et al., 2001). However, even the most ardent supporters of stated preference methods would attest to its disadvantages. Perhaps the greatest drawback to stated preference techniques is its hypothetical nature. People can easily say they will pay a certain amount for a good, but often find giving up actual money to be more difficult.
