The importance of social learning for non-market valuation

Grainger, Daniel, and Stoeckl, Natalie (2019) The importance of social learning for non-market valuation. Ecological Economics, 164. 106339.

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Abstract

Neoclassical valuation methods often measure the contribution that non-market goods make to utility as income compensations. This circumvents Arrow's impossibility (AI) –a theoretical proof establishing the impossibility of social preferences – but those methods cannot be used in all settings. We build on Arrow's original proof,showing that with two additional axioms that allow for social learning, a second round of preference elicitation with a social announcement after the first, generates logically consistent social preferences. In short: deliberation leads to convergence. A ‘web-game’ aligning with this is trialed to select real world projects, in a deliberative way, with the board of an Australian Aboriginal Corporation. Analysis of the data collected in the trial validates our theory; our test for convergence is statistically significant at the 1% level. Our results also suggest complex social goods are relatively undervalued without deliberation. Most non-market valuation methods could be easily adapted to facilitate social learning

Item ID: 60394
Item Type: Article (Research - C1)
ISSN: 1873-6106
Keywords: social welfare, non-market valuation, deliberative valuation, deliberative institutions, cost benefit analysis, Arrow’s impossibility
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Copyright Information: © 2019 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license.
Funders: NESP Northern Australia Economics Resources Hub, Australian Research Council (Discovery Indigenous Scheme)
Projects and Grants: Project 5.3 of the Northern Australian Environmental Resources Hub of NESP, Grant number IN190100061, 2019 (ARC Discovery Indigenous Scheme)
Date Deposited: 09 Oct 2019 05:41
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140205 Environment and Resource Economics @ 25%
14 ECONOMICS > 1402 Applied Economics > 140213 Public Economics- Public Choice @ 50%
14 ECONOMICS > 1401 Economic Theory > 140103 Mathematical Economics @ 25%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910206 Market-Based Mechanisms @ 50%
91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910209 Preference, Behaviour and Welfare @ 50%
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