Policy makers, regulators, public utilities and businesses often want to understand people’s willingness to pay for service or environmental improvements, or how much they value an institution or policy. Such values can be incorporated within economic appraisals to inform a decision on whether or not a scheme should go ahead, to prioritise amongst schemes, or to demonstrate value for money. More recently, economic values are also used within regulatory incentive schemes.
The core methods used for measuring economic values are the following:
- Stated preference
- Contingent valuation, choice modelling / choice-based conjoint, MaxDiff
- Revealed preference
- Averting behaviour, Travel cost / Site choice, Hedonic pricing.
- Subjective wellbeing valuation
- Value transfer
Increasingly, clients are often also interested in frameworks for capturing and triangulating values from multiple sources.
- Valuation of service improvements for water company business plans, via stated preference measurement of their customers’ willingness to pay for potential packages of service level changes.
- Valuation of drinking water quality via analysis of expenditures on bottled water, water softening and related areas.
- Valuation of river and bathing water quality levels via analysis of distances travelled by visitors, and associated travel costs, to sites with different quality levels
- Valuation of travel time and reliability changes for input into transportation models, via stated preference studies
- Measurement of values for improvements to freshwater fisheries combining stated and revealed preference methods
- Stated preference valuation of train service improvements for rail franchise bids
- Stated preference valuation of multi-modal transport improvements for a city transport authority
Development of value capture and triangulation frameworks for water company business planning.