American Journal of Business and Society
Articles Information
American Journal of Business and Society, Vol.3, No.1, Mar. 2018, Pub. Date: Aug. 20, 2018
Stated Preference (SP) Method in Economic Valuation
Pages: 1-10 Views: 511 Downloads: 363
Authors
[01] Chiam Chooi Chea, Cluster of Business and Management, Open University Malaysia, Selangor, Malaysia.
Abstract
Tangible heritage is heritage that is “built”. According to UNESCO convention in 2003, intangible cultural heritage comprises information in the dynamic form of expressions, representations, practices, knowledge and skills that are associated with instruments, objects, artifacts and cultural spaces or landscapes that communities, groups etc. These include oral traditions, performing arts, social practices, rituals, festive events, knowledge and practices about nature. In the past, heritage experts tend to regard economists as being insensitive and heavy-handed, focused too single-mindedly on financial measurement, and overlooking the true cultural significance of heritage assets [13]. When market fails, as in the case for example of public goods, it is the willingness-to-pay (WTP) or willingness-to-accept (WTA) of individual consumers that expresses the value of the goods in question. There are two methods for measuring the WTP and WTA, namely the revealed preference (RP) method and the stated preference (SP) method in measuring the value of non-market goods. This article study seeks to discuss the SP methods using past studies and the weakness of this approach and yet still one of the most commonly used approach in valuing non-market goods particularly the contingent valuation method (CVM) and choice experiment (CE). The results will be able to highlight the strengths of CVM and CE methods despite having its list of weaknesses in the field of economic value elicitation methods.
Keywords
Stated Preference Method (SP), Willingness-to-Pay (WTP), Contingent Valuation Method (CVM), Choice Experiment (CE)
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