A Primer on Nonmarket Valuation
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The Method of Paired Comparisons
Introduced nearly 150 years ago, the method of paired comparison is perhaps the most straightforward way of presenting items for comparative judgment. With the method items are presented in pairs to one or more judges; for each pair the judge selects the item that best satisfies the specified judgment criterion. The items can be of almost any type including, importantly, goods, services, and environmental conditions. As demonstrated by Thurstone in the 1920s, the method can yield an interval-scale ordering of items along a dimension such as preference or importance. For example, if the items are alternative improvements in forest condition and the judges are members of the public, the method can reveal the public’s collective judgment of the relative importance of the improvements. And when the items to be judged include both goods and monetary amounts, the method can yield estimates of monetary value of the goods. In the following papers we report on applications of the method to evaluate environmental losses and to value public goods.
- Kingsley, David, C., and Thomas C. Brown. 2013. Estimating willingness to accept using paired comparison choice experiments: tests of robustness. Journal of Environmental and Economics and Policy 2(2): 119-132.
- Kingsley, David, C., and Thomas C. Brown. 2013. Value learning and the willingness to accept – willingness to pay disparity. Economic Letters 120(3):473-476.
- Kingsley, David C. and Thomas C. Brown. 2012. Does prompting for revision influence subjects' offers in willingness to accept -- willingness to pay lab experiments? Economics Bulletin. 32(3):2580–2585
(269 KB PDF file)
- Kingsley, David C. and Thomas C. Brown. 2010. Preference Uncertainty, Preference Learning, and Paired Comparison Experiments. Land Economics. 86(3):530–544
(1.1 MB PDF file)
- Brown, Thomas C. and George L. Peterson. 2009. An Enquiry into the Method of Paired Comparison: Reliability, Scaling, and Thurstone’s Law of Comparative Judgment. RMRS-GTR-216WWW.
Fort Collins, CO: U.S. Department of Agriculture, Forest Service,
Rocky Mountain Research Station. 98 p.
Brown, Thomas C., David Kingsley, George L. Peterson, Nick Flores, Andrea Clarke, and Andrej Birjulin. 2008. Reliability of individual valuations of public and private goods: response time, preference learning, and choice consistency. Journal of Public Economics 92(7):1595-1606.
- Brown, Thomas C., George L. Peterson, R. Marc Brodersen, Valarie Ford, and Paul A. Bell. 2005. The judged seriousness of an environmental loss is a matter of what caused it. Journal of Environmental Psychology 25(1): 13-21.
(1,205 KB pdf file)
- Brown, Thomas C. and George L. Peterson. 2003. Multiple Good Valuation. In A Primer on Nonmarket Valuation. Patricia A. Champ, Kevin Boyle, and Thomas C. Brown, eds. Kluwer Academic Press, Boston, 576 pages.
- Brown, Thomas C., Dawn Nannini, Robert Gorter, Paul Bell, and George L. Peterson. 2002. Judged seriousness of environmental losses: reliability and cause of loss. Ecological Economics 42(3): 479-491.
(669 KB pdf file)
- Peterson, George L., and Thomas C. Brown. 1998. Economic Valuation by the Method of Paired Comparison, with Emphasis on Tests of the Transitivity Axiom. Land Economics 74(2):240-261.
(901 KB PDF file)
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