Introduction to Revealed Preference Methods

Revealed preference methods draw statistical inferences on values from actual choices people make within markets. Estimation of the values people place on environmental amenities and disamenities proceeds by specifying a theoretical framework and conducting data analyses from purchase decisions (prices paid and quantities purchased) according to this conceptual framework. Four commonly used revealed preference methods are discussed in the next three chapters (Chapter 9, travel cost; Chapter 10, hedonics; Chapter 11, defensive behavior and damage costs).