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Preference Uncertainty in Non‐Market Valuation: A Fuzzy Approach
Author(s) -
Kooten G. Cornelis,
Krcmar Emina,
Bulte Erwin H.
Publication year - 2001
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/0002-9092.00172
Subject(s) - valuation (finance) , probabilistic logic , fuzzy logic , contingent valuation , economics , decision maker , econometrics , fuzzy number , mathematical economics , computer science , fuzzy set , microeconomics , mathematics , willingness to pay , operations research , artificial intelligence , finance
In this article, we consider uncertain preferences for non‐market goods, but we move away from a probabilistic representation of uncertainty and propose the use of fuzzy contingent valuation. We assume that a decision maker never fully knows her own utility function and we treat utility as a fuzzy number. The methodology is illustrated using data on forest valuation in Sweden. Fuzzy contingent valuation provides estimates of resource value in the form of a fuzzy number and includes estimates obtained using a standard probabilistic approach.