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Valuation Techniques: Revealed Preference
Revealed Preference Methods
It is meant to document actual behavior of individuals and as such considered more empirical than the hypothetetical Stated Preference Methods
Hedonic Pricing Methods
Looks at trends in market pricing across different geographic locations in order to infer the value of different quantities of environmental goods each location holds. It does this by comparing prices between the different housing markets, then inferring how the differences in environmental quality are implicit in the price differentials. It requires for all people involved in the housing transactions to be well informed and that the market to be in equilibrium.Plus, it's limited to only those environmental goods that are able to be linked to the housing market, which isn't all of the environmental qualities.
Travel Cost Models
The examination of people's travel-costs (natural park fees, transportation costs etc.) is used to infer the consumer surplus and WTP of travelers to locales linked to environmental goods.
As with every method, there are some problems associated with the Travel Cost Method.
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