Application of choice experiment: theoretical aspect

Among the environmental valuation methods, the Choice Experiment (CE) method is considered to be the most appropriate method for valuing benefits of attributes related to a particular environmental commodity. This is because of the CE method allows not only for estimation of the value of the environmental good as a whole, but also for the implicit values of its attributes. Under this method a sample of people is asked to choose their most preferred alternatives from a sequence of grouped options that relate to different management strategies. Each option is described in terms of its outcomes and a personal monetary cost to be borne personally by the respondent. In analysing the choices made by respondents, it is possible to infer the trade-off that people are willing to make between money and greater benefits of different attributes. This paper aims at explaining the basic steps of undertaking a choice experiment study which is increasingly becoming popular technique in both the developed as well as in developing countries. Researchers who are interested in applying CE method for their research can use this as a basic guidance for their work.