Chapter 13. Revealed Preference Methods

Nonmarket Valuation Methods

Travel Cost Method

The Hedonic Price Method

Defensive Expenditures Method

Simple Valuation Methods

The Value of Time Saved, VTTS

In the absence of market imperfections (i.e., people can choose the number of hours they work and there is no unemployment), the wage rate is a first approximation of the marginal value of time. However, there are some problems in using the wage rate to value time saved:

The Value a Statistical Life, VSL

Intermediate Good Method

Asset Valuation Method

Problems with Simple Valuation Methods