Eliciting preferences for well-being measurement: A comparison of methods

Overview & Synopsis

The elicitation of willingness to pay remains a serious empirical challenge. Such elicitation is important for cost-benet analysis. It is also central to the estimation of equivalent income, a multidimensional measure of well-being that respects individual preferences by adjusting income to incorporate an individual's willingness to pay to achieve a reference level in non-income dimensions. In this paper, we test four different preference elicitation methods with an online survey of almost 2,000 French respondents. Our experimental design allows us to compare both between-and within-respondent variations in willingness to pay and equivalent income. In addition, we consider two non-income dimensions: health and social interactions, the latter of which has been relatively neglected in welfare economics literature. We find large dierences between the elicited values across methods and dimensions.