Ecosystem-Service Choice Experiment

A discrete choice experiment is a survey-based, stated-preference method for valuing changes in ecosystem services that have no market price. As set out by Hanley, Wright and Adamowicz in 1998, respondents are shown a series of choice sets, each offering alternatives described by a common set of attributes — including environmental features such as water quality, biodiversity, or habitat area, and a cost or price attribute — and asked to pick their preferred option. Grounded in random utility theory and Lancaster's view of goods as bundles of attributes, the method models each choice as the selection of the highest-utility alternative and estimates how much utility each attribute contributes. Dividing an attribute's coefficient by the cost coefficient yields the marginal willingness to pay for that attribute, allowing economists to put a monetary value on ecosystem-service improvements.