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The importance of social learning for non-market valuation

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Grainger, D and Stoeckl, N ORCID: 0000-0001-5899-4771 2019 , 'The importance of social learning for non-market valuation' , Ecological Economics, vol. 164 , pp. 1-9 , doi: 10.1016/j.ecolecon.2019.05.019.

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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 Type: Article
Authors/Creators:Grainger, D and Stoeckl, N
Keywords: social welfare, non-market valuation, deliberative valuation, deliberative institutions, cost benefit analysis, Arrow's impossibility
Journal or Publication Title: Ecological Economics
Publisher: Elsevier Science Bv
ISSN: 0921-8009
DOI / ID Number: 10.1016/j.ecolecon.2019.05.019
Copyright Information:

© 2019 The Authors. Licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) http://creativecommons.org/licenses/by-nc-nd/4.0/

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